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Exhibit (5)(a)
AMENDED AND RESTATED ADVISORY AGREEMENT
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AGREEMENT made as of April 1, 1991 between THE ARCH FUND, INC.
a Maryland corporation (herein called the "Fund"), and MISSISSIPPI VALLEY
ADVISORS, INC., a Missouri corporation (the "Adviser").
WHEREAS, the Fund is registered as an open-end diversified, management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the Fund desires to retain the Adviser to furnish investment
advisory and administrative services to the Fund and the Adviser is willing to
so furnish such services;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT.
(a) The Fund hereby appoints the Adviser to act
as investment adviser to The Arch Money Market, Capital Appreciation,
Diversified Fixed Income, and U.S. Government Securities Portfolios
(collectively, the "Portfolios) for the period and on the terms set forth in
this Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
(b) In the event that the Fund establishes one or
more portfolios other than the Portfolios with respect to which it desires to
retain the Adviser to act as investment adviser hereunder, the Fund shall
notify the Adviser in writing. If the Adviser is willing to render such
services, it shall notify the Fund in writing whereupon, subject to such
shareholder approval as may be required pursuant to Paragraph 9 hereof, such
portfolio shall become a Portfolio hereunder and the compensation payable by
such new Portfolio to the Adviser will be as agreed in writing at the time.
2. DELIVERY OF DOCUMENTS. The Fund has furnished the
Adviser with copies properly certified or authenticated of each of the
following:
(a) The Fund's Articles of Incorporation as filed
with the Department of Assessments and Taxation of the State
of Maryland on September 9, 1982 and all amendments thereto
(such Articles, as presently in effect and as they shall from
time to time be amended, are herein called the "Articles of
Incorporation");
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(b) The Fund's By-Laws and amendments thereto
(such By-Laws, as presently in effect and as they shall from
time to time be amended, are herein called the "By-Laws");
(c) Resolutions of the Fund's Board of Directors
authorizing the appointment of the Adviser as investment
adviser and approving this Agreement;
(d) The Fund's Notification of Registration on
Form N-8A under the 1940 Act as filed with the Securities and
Exchange Commission on September 10, 1982 and all amendments
thereto;
(e) The Fund's Registration Statement on Form N-1
under the Securities Act of 1933 as amended ("1933 Act") (File
No. 2-79285) and under the 1940 Act as filed with the
Securities and Exchange Commission on September 10, 1982 and
all amendments thereto; and
(f) The Fund's most recent Prospectus or
Prospectuses (such prospectus or prospectuses, as presently in
effect and all amendments and supplements thereto, are herein
called the "Prospectus").
The Fund will furnish the Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
3. MANAGEMENT. Subject to the supervision of the Fund's
Board of Directors, the Adviser will provide a continuous investment program
for each of the Portfolios, including investment research and management with
respect to all securities and investments and cash equivalents in the
Portfolios. The Adviser will determine from time to time what securities and
other investments will be purchased, retained or sold by the Fund for each of
its Portfolios. The Adviser will provide the services under this Agreement in
accordance with the investment objectives, policies and restrictions of each
Portfolio as stated in the Prospectus and resolutions of the Fund's Board of
Directors. The Adviser further agrees that it:
(a) will conform with all applicable Rules and
Regulations of the Securities and Exchange Commission and will
in addition conduct its activities under this Agreement in
accordance with regulations of the Board of Governors of the
Federal Reserve System pertaining to investment advisory
activities of bank holding companies to the same extent as if
such regulations were by their terms applicable to its
activities;
(b) will not make loans to any person to
purchase or carry Fund shares or make loans to the Fund;
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(c) will place orders pursuant to its investment
determinations for each Portfolio either directly with the
issuer or with any broker or dealer. In placing orders with
brokers and dealers the Adviser will attempt to obtain the
best net price and the most favorable execution of its orders.
Consistent with this obligation, when the execution and price
offered by two or more brokers or dealers are comparable, the
Adviser may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who provide the
Fund with research advice and other services. In no instance
will portfolio securities be purchased from or sold to the
Adviser, TBC Funds Distributor, Inc. (the Fund's distributor),
or any affiliated person of either the Fund, the Adviser or
TBC Funds Distributor, Inc., unless permitted pursuant to an
order of the Securities and Exchange Commission or applicable
rules;
(d) will maintain books and records with respect
to the securities transactions of the Portfolios and will
furnish the Fund's Board of Directors such periodic and
special reports as the Board may request;
(e) will maintain a policy and practice of
conducting its operations independently of the Commercial
Division of Mercantile Bank National Association ("Mercantile
Bank"). When the Adviser makes investment recommendations for
a Portfolio, its personnel will not inquire or take into
consideration whether the issuer of securities proposed for
purchase or sale for the Portfolio's account are customers of
the Commercial Division. In dealing with commercial
customers, the Commercial Division of Mercantile Bank will not
inquire or take into consideration whether securities of those
customers are held by a Portfolio;
(f) will not purchase shares of any of the
Portfolios for itself or for accounts with respect to which it
exercises sole investment discretion in connection with such
transactions except as permitted by the Fund's Board of
Directors or by federal, state and local law; and
(g) will treat confidentially and as proprietary
information of the Fund all records and other information
relative to any of the Portfolios and prior, present or
potential shareholders, and will not use such records and
information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Fund, which
approval shall
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not be unreasonably withheld and may not be withheld where
the Adviser may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or
when so requested by the Fund.
4. SERVICES NOT EXCLUSIVE. The investment management
services furnished by the Adviser hereunder are not to be deemed exclusive, and
the Adviser shall be free to furnish similar services to others so long as its
services under this Agreement are not impaired thereby.
5. BOOKS AND RECORDS. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that
all records which it maintains for each Portfolio are the property of the Fund
and further agrees to surrender promptly to the Fund any of such records upon
the Fund's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
6. EXPENSES. During the term of this Agreement, the
Adviser will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Portfolios.
7. COMPENSATION.
(a) For the services provided and the expenses
assumed pursuant to this Agreement, the Fund will pay the
Adviser and the Adviser will accept as full compensation
therefor a fee, computed daily and paid monthly (in arrears),
at an annual rate of .40% of the first $1.5 billion, .35% of
the next $1.0 billion, and .25% on amounts over $2.5 billion
of the average net assets held in The Arch Money Market
Portfolio, .55% of the average net assets of The Arch Capital
Appreciation Portfolio, .45% of the average net assets of The
Arch Diversified Fixed Income Portfolio, and .45% of the
average net assets of The Arch U.S. Government Securities
Portfolio.
(b) If in any fiscal year the aggregate expenses
of one or more Portfolios (as defined under the securities
regulations of any state having jurisdiction over the Fund)
exceed the expense limitations of any such state, the Adviser
will reimburse the Fund for 60% of such excess expenses. The
obligation of the Adviser to reimburse the Fund hereunder is
limited in any fiscal year to the amount of its fee hereunder
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attributable to all Fund Portfolios for such fiscal year,
PROVIDED, HOWEVER, that notwithstanding the foregoing,
the Adviser shall reimburse the Fund for 60% of such excess
expenses regardless of the amount of fees paid to it during
such fiscal year to the extent that the securities regulations
of any state having jurisdiction over the Fund so require.
Such expense reimbursement, if any, will be estimated,
reconciled and paid on a monthly basis.
(c) The Adviser may voluntarily waive from time
to time a portion or all of its advisory fee otherwise payable
to it hereunder with respect to one or more of the Portfolios.
(d) The fee attributable to each Portfolio shall
be the several (and not joint or joint and several) obligation
of each Portfolio.
8. LIMITATION OF LIABILITY. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under
this Agreement.
9. DURATION AND TERMINATION. This Agreement will become
effective with respect to a Portfolio upon approval of this Agreement by vote
of a majority of the outstanding voting securities of such Portfolio, and,
unless sooner terminated as provided herein, shall continue with respect to
such Portfolio until March 31, 1992. Thereafter, if not terminated, this
Agreement shall continue with respect to a Portfolio for successive periods of
twelve months each ending on March 31 each year, PROVIDED such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Fund's Board of Directors 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, and (b) by the Fund's Board of Directors or by vote of
a majority of the outstanding voting securities of such Portfolio.
Notwithstanding the foregoing, this Agreement may be terminated with respect to
a Portfolio at any time, without the payment of any penalty, by the Fund (by
vote of the Fund's Board of Directors or by vote of a majority of the
outstanding voting securities of such Portfolio), or by the Adviser on sixty
days' written notice. This Agreement will immediately terminate in the event
of its assignment. (As used in this Agreement, the terms "majority of the
outstanding
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voting securities," "interested persons" and "assignment" shall have the same
meaning of such terms in the 1940 Act.)
10. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be changed, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
changes, discharge or termination is sought. Any amendment of this Agreement
shall be subject to the 1940 Act.
11. MISCELLANEOUS. The captions in this Agreement are
included for convenience or reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and shall be
governed by Missouri law.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
THE ARCH FUND, INC.
Attest:/s/ Xxxxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxx
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MISSISSIPPI VALLEY ADVISORS INC.
Attest:/s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx
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