EXHIBIT 5(a)
INVESTMENT MANAGEMENT AGREEMENT
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AGREEMENT made as of the 1st day of January, 1997, by and between FLAGSHIP
UTILITY INCOME FUND (the "Fund"), a series of FLAGSHIP ADMIRAL FUNDS INC., a
Maryland corporation, and NUVEEN ADVISORY CORP., a Delaware corporation (the
"Adviser").
W I T N E S S E T H
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In consideration of the mutual covenants hereinafter contained, it is hereby
agreed by and between the parties hereto as follows:
1. The Fund hereby employs the Adviser to act as the investment adviser for,
and to manage the investment and reinvestment of the assets of the Fund in
accordance with the Fund's investment objective and policies and limitations,
and to administer the Fund's affairs to the extent requested by and subject to
the supervision of the Board of Directors of the Fund for the period and upon
the terms herein set forth. The investment of such assets shall be subject to
the Fund's policies, restrictions and limitations with respect to securities
investments as set forth in the Fund's registration statement on Form N-1A under
the Securities Act of 1933 and the Investment Company Act of 1940 covering the
Fund's shares of common stock, including the Prospectus and Statement of
Additional Information forming a part thereof, all as filed with the Securities
and Exchange Commission and as from time to time amended, and all applicable
laws
and the regulations of the Securities and Exchange Commission relating to the
management of registered open-end, management investment companies.
The Adviser accepts such employment and agrees during such period to render such
services, to furnish office facilities and equipment and clerical, bookkeeping
and administrative services (other than such services, if any, provided by the
Fund's custodian, transfer agent and shareholder service agent, and the like)
for the Fund, to permit any of its officers or employees to serve without
compensation as trustees or officers of the Fund if elected to such positions,
and to assume the obligations herein set forth for the compensation herein
provided. The Adviser shall, for all purposes herein provided, be deemed to be
an independent contractor and, unless otherwise expressly provided or
authorized, shall have no authority to act for nor represent the Fund in any
way, nor otherwise be deemed an agent of the Fund.
2. For the period from January 1, 1997 through January 31, 1997, the Fund will
pay to the Adviser for the services and facilities described in Section 1, an
investment management fee computed daily and paid at the end of the period at an
annual rate of .50% of the average daily net assets of the Fund up to and
including $100 million, plus .45% of such net assets over $100 million up to and
including $200 million, plus .40% of such net assets over $200 million up to and
including $300 million, plus .35% of such net assets over $300 million up to and
including $500 million, plus .30% of such net assets over $500 million.
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From February 1, 1997 forward, the Fund will pay to the Adviser at the end of
each month for the services and facilities described in Section 1, an investment
management fee computed at an annual rate of:
Rate Net Assets
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.5000% For the first $125 million
.4875% For the next $125 million
.4750% For the next $250 million
.4625% For the next $500 million
.4500% For the next $1 billion
.4250% For assets over $2 billion
For the month and year in which this Agreement becomes effective, or terminates,
there shall be an appropriate proration on the basis of the number of days that
the Agreement shall have been in effect, during the month and year,
respectively. The services of the Adviser to the Fund under this Agreement are
not to be deemed exclusive, and the Adviser shall be free to render similar
services or other services to others so long as its services hereunder are not
impaired thereby.
Regardless of any of the above provisions, the Adviser guarantees that the total
expenses of the Fund in any fiscal year, exclusive of taxes, interest, brokerage
commissions, and extraordinary expenses such as litigation costs, shall not
exceed, and the Adviser undertakes to pay or refund to the Fund any amount up to
but not greater than the aggregate fees received by the Adviser under this
Agreement for such fiscal year, the limitation imposed by any jurisdiction in
which the Fund continues to offer and sell shares after exceeding such
limitation.
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The net asset value of the Fund shall be calculated as provided in the Articles
of Incorporation of the Fund. On each day when the net asset value is not
calculated, the net asset value of a share of beneficial interest of the Fund
shall be deemed to be the net asset value of such share as of the close of
business on the last day on which such calculation was made for the purpose of
the foregoing computations.
3. The Adviser shall arrange for officers or employees of the Adviser to
serve, without compensation from the Fund, as trustees, officers or agents of
the Fund, if duly elected or appointed to such positions, and subject to their
individual consent and to any limitations imposed by law.
4. Subject to applicable statutes and regulations, it is understood that
officers, trustees, or agents of the Fund are, or may be, interested in the
Adviser as officers, directors, agents, shareholders or otherwise, and that the
officers, directors, shareholders and agents of the Adviser may be interested in
the Fund otherwise than as trustees, officers or agents.
5. The Adviser shall not be liable for any loss sustained by reason of the
purchase, sale or retention of any security, whether or not such purchase, sale
or retention shall have been based upon the investigation and research made by
any other individual, firm or corporation, if such recommendation shall have
been selected with due care and in good faith, except loss resulting from
willful misfeasance, bad faith, or gross negligence on the part of the Adviser
in the
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performance of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
6. The Adviser currently manages other investment accounts and funds,
including those with investment objectives similar to the Fund, and reserves the
right to manage other such accounts and funds in the future. Securities
considered as investments for the Fund may also be appropriate for other
investment accounts and funds that may be managed by the Adviser. Subject to
applicable laws and regulations, the Adviser will attempt to allocate equitably
portfolio transactions among the Fund and the portfolios of its other investment
accounts and funds purchasing or selling securities whenever decisions are made
to purchase or sell securities by the Fund and one or more of such other
accounts or funds simultaneously. In making such allocations, the main factors
to be considered by the Adviser will be the respective investment objectives of
the Fund and such other accounts and funds, the relative size of portfolio
holdings of the same or comparable securities, the availability of cash for
investment by the Fund and such other accounts and funds, the size of investment
commitments generally held by the Fund and such accounts and funds, and the
opinions of the persons responsible for recommending investments to the Fund and
such other accounts and funds.
7. This Agreement shall continue in effect until August 1, 1997, unless and
until terminated by either party as hereinafter provided, and shall continue in
force from year to year thereafter, but only as long as such continuance is
specifically approved, at least annually, in the manner required by the
Investment Company Act of 1940.
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This Agreement shall automatically terminate in the event of its assignment, and
may be terminated at any time without the payment of any penalty by the Fund or
by the Adviser upon sixty (60) days' written notice to the other party. The Fund
may effect termination by action of the Board of Directors, or, by vote of a
majority of the outstanding voting securities of the Fund, accompanied by
appropriate notice.
This Agreement may be terminated, at any time, without the payment of any
penalty, by the Board of Directors of the Fund, or, by vote of a majority of the
outstanding voting securities of the Fund, in the event that it shall have been
established by a court of competent jurisdiction that the Adviser, or any
officer or director of the Adviser, has taken any action which results in a
breach of the covenants of the Adviser set forth herein.
Termination of this Agreement shall not affect the right of the Adviser to
receive payments on any unpaid balance of the compensation, described in Section
2, earned prior to such termination.
8. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule, or otherwise, the remainder shall not be thereby
affected.
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9. The Adviser and its affiliates reserve the right to grant, at any time, the
use of the name "Nuveen" or the name "Flagship", or any approximation or
abbreviation thereof, to any other investment company or business enterprise.
Upon termination of this Agreement by either party, or by its terms, the Fund
shall thereafter refrain from using any name of the Fund which includes "Nuveen"
or "Flagship" or any approximation or abbreviation thereof, or is sufficiently
similar to such name as to be likely to cause confusion with such name, and
shall not allude in any public statement or advertisement to the former
association.
10. Any notice under this Agreement shall be in writing, addressed and delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate for receipt of such notice.
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IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed on the day and year above written.
FLAGSHIP UTILITY INCOME FUND,
a series of Flagship Admiral Funds Inc.
by: /s/ Xxxxxxx X. Xxxxx
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title: President
Attest: /s/ Xxxxxxx X. Xxxxxxxxxxx
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Secretary
NUVEEN ADVISORY CORP.
by: /s/ Xxxxx X. Xxxxxxxxxx
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Vice President
Attest: /s/ Xxxxxxx X. Xxxxxxxxx
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Assistant Secretary
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