EXHIBIT NO. 5
INVESTMENT ADVISORY AGREEMENT
U.S. TREASURY RESERVES PORTFOLIO
INVESTMENT ADVISORY AGREEMENT, dated as of February 22, 1991, by and
between U.S. Treasury Reserves Portfolio, a New York business trust (the
"Portfolio"), and CITIBANK, N.A., a national banking association ("Citibank" or
the "Adviser").
WITNESSETH:
WHEREAS, the Portfolio is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940, as amended
(collectively with the rules and regulations promulgated thereunder, the "1940
Act"), and
WHEREAS, the Portfolio wishes to engage the Adviser to provide certain
investment advisory services for the Trust, and the Adviser is willing to
provide such investment advisory services for the Portfolio 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:
1. DUTIES OF THE ADVISER. The Adviser shall provide the Portfolio
with such investment advice and supervision as the latter may from time
to time consider necessary for the proper supervision of its investment
assets. Citibank shall act as the Adviser to the Portfolio 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 Portfolio shall be held
uninvested, subject always to the restrictions of the Portfolio's
Declaration of Trust, dated February 1, 1991, and By-laws, as each may
be amended from time to time (respectively, the "Declaration" and the
"By-Laws"), to the provisions of the 1940 Act, and to the Portfolio's
then-current Registration Statement under the 0000 Xxx. 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 securities held by the Portfolio shall be exercised.
Should the Board of Trustees of the Portfolio at any time, however,
make any definite determination as to 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similarly notified that such determination has been revoked. The
Adviser shall take, on behalf of the Portfolio, 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 securities for the Portfolio's account with the brokers or
dealers selected by it, and to that end the Adviser is authorized as
the agent of the Portfolio to give instructions to the custodian of the
Portfolio as to deliveries of securities and payments of cash for the
account of the Portfolio. In connection with the selection of such
brokers or dealers and the placing of such orders, the Adviser is
directed to seek for the Portfolio in its best judgment, prompt
execution in an effective manner at the most favorable price. Subject
to this requirement of seeking the most favorable price, securities may
be bought from or sold to broker-dealers who have furnished
statistical, research and other information or services to the Adviser
or the Portfolio, subject to any applicable laws, rules and
regulations. In making purchases or sales of securities or other
property for the account of the Portfolio the Adviser may deal with
itself or with the Trustees of the Portfolio or the Portfolio's
exclusive placing agent, to the extent such actions are permitted by
the 1940 Act.
2. ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall furnish
at its own expense all necessary services, facilities and personnel in
connection with its responsibilities under Section 1 above. It is
understood that the Portfolio 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 Portfolio; fees and expenses of independent auditors, of legal
counsel and of any transfer agent, administrator, distributor,
shareholder servicing agent, registrar or dividend disbursing agent of
the Portfolio; expenses of distributing and redeeming shares and
servicing shareholder accounts; expenses of preparing, printing and
mailing notices, proxy statements and reports to governmental officers
and commissions and investors in the Portfolio; expenses connected with
the execution, recording and settlement of security transactions;
insurance premiums; fees and expenses of the custodian for all services
to the Portfolio, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the
net asset value of the Portfolio; and expenses of meetings of the
Portfolio's investors.
3. COMPENSATION OF THE ADVISER. For the services to be rendered,
the Portfolio shall pay to the Adviser an investment advisory fee
computed and paid monthly at an annual rate equal to .15% of the
Portfolio's average daily net assets for its then-current fiscal year.
If Citibank serves as Adviser for less than the whole of any period
specified in this Section 3, the compensation to Citibank, as Adviser,
shall be prorated.
4. COVENANTS OF THE ADVISER. The Adviser agrees that it will not
deal with itself, or with the Trustees of the Portfolio or the
Portfolio's exclusive placing agent as principals in making purchases
or sales of securities or other property for the account of the
Portfolio, except as permitted by the 1940 Act, will not take a long or
short position in shares of the Portfolio except as permitted by the
Declaration, and will comply with all other provisions of the
Declaration and By-Laws and the then-current Registration Statement of
the Portfolio under the 1940 Act relative to the Adviser and its
Directors and officers.
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 of securities transactions for the Portfolio, 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 Section 5, the term "Adviser"
shall include Directors, officers and employees of the Adviser as well
as that association itself.
6. ACTIVITIES OF THE ADVISER. The services of the Adviser to the
Portfolio are not to be deemed to be exclusive, Citibank being free to
render investment advisory and/or other services to others. It is
understood that Trustees and officers of and investors in the Portfolio
are or may be or may 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
Trust and that the Adviser may be or may become interested in the
Portfolio as a shareholder or otherwise.
7. DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT. This
Agreement shall become effective as of the day and year first above
written and shall govern the relations between the parties hereto
thereafter, and shall remain in force until February 22, 1993 on which
date it will terminate unless its continuance after February 22, 1993
is "specifically approved at least annually" (a) by the vote of a
majority of the Trustees of the Portfolio who are not "interested
persons" of the Portfolio or of the Adviser at a meeting specifically
called for the purpose of voting on such approval, and (b) by the Board
of Trustees of the Portfolio or by "vote of a majority of the
outstanding voting securities" of the Portfolio.
The Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Portfolio, or by the Adviser, in each case on not more than
60 days' nor less than 30 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 the
"vote of a majority of the outstanding voting securities" of the Portfolio.
The terms "specifically approved at least annually", "vote of a
majority of the outstanding voting securities", "assignment", "affiliated
person", and "interested persons", when used in this Agreement, shall have the
respective meanings specified in, and shall be construed in a manner consistent
with, the 1940 Act, subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission under said Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
U.S. TREASURY RESERVES PORTFOLIO CITIBANK, N.A.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Title: President Title: VP - Funds Administration
