EXHIBIT NO. 99.5(b)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of this 23rd day of July, 1986, by and
between MFS/SUN LIFE SERIES TRUST, a Massachusetts business trust (the "Trust"),
and MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware corporation ("MFS" or
the "Adviser").
WITNESSETH:
WHEREAS, the Trust is registered under the Investment Company Act of 1940 and is
engaged in business as an open-end investment company that issues Shares of
Beneficial Interest (without par value) ("Shares") that are divided into seven
separate series of shares;
WHEREAS, the Adviser is willing to provide business management services to the
Trust with respect to the "Conservative Growth Series" the "Government Plus
Securities Series" and the "Zero Coupon Series" of the Trust (the "Series") 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 each of the Series
with such investment advice and supervision as the Trustees may from time to
time consider necessary for the proper supervision of the assets of each Series.
The Adviser shall act as Adviser to each Series and 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 each
Series shall be held uninvested , subject always to the restrictions of the
Trust's Declaration of Trust, dated February 15, 1985, and the Trust's By-Laws,
as each may be amended from time to time (respectively, the "Declaration" and
the "By-Laws"), to the provisions of the Investment Company Act of 1940 and the
Rules, Regulations and orders thereunder, and to the Trust's then-current
Prospectus. The Adviser shall also make recommendations as to the exercise of
voting rights, rights to consent to corporate action and any other rights
pertaining to the securities in the portfolio represented by the Shares of each
Series. Should the Trustees at any time, however, make any definite
determination as to investment policy with respect to any one or more of the
Series or all Series collectively 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in such notice or until similarly notified that such determination has been
revoked.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 each Series, 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 of each Series for the Trust's account with brokers or
dealers selected by it, and to that end the Adviser is authorized as the agent
of the Trust to give instructions to the Custodian of the Trust s to deliveries
of securities and payments of cash for the account of the Trust. In connection
with the selection of such brokers or dealers and the placing of such orders for
the Government Plus Securities Series and Zero Coupon Series, the Adviser is
directed to seek execution at the best available price. Subject to this
requirement of seeking the best available price, such securities may be bought
from or sold to broker/dealers who have furnished statistical, research, and
other information or services to the Adviser. For the Conservative Growth
Series, the Adviser is directed to seek execution of portfolio transactions at
the best available price by responsible brokerage firms at reasonably
competitive commission rates. In fulfilling this requirement, the Adviser shall
not be deemed to have acted unlawfully or to have breached any duty created by
this Agreement or otherwise, solely by reason of its having caused the Trust on
behalf of the Conservative Growth Series to pay a broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if the Adviser determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities with respect to
the Conservative Growth Series and to other clients of the Adviser as to which
the Adviser exercises investment discretion.
2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense all necessary administrative services, including office space,
equipment, clerical personnel, investment advisory facilities, and executive and
supervisory personnel for managing the investments of each Series, effecting the
portfolio transactions of each Series, and, in general, administering the
Trust's affairs. The Adviser shall arrange, if desired by the Trust, for
Directors, officers and employees of the Adviser or its "affiliates" to service
without compensation as Trustees, officers or agents of the Trust if duly
elected or appointed to such positions and subject to their individual consent
and to any limitations imposed by law. It is understood that the Trust will pay
all of its own expenses including, without limitation, compensation of those
Trustees who are not "affiliated" with the Adviser; governmental fees; interest
charges; taxes; membership dues in the Investment Company Institute allocable to
the Trust; fees and expenses of independent auditors, of legal counsel and of
any transfer agent or registrar of the Trust; expenses of repurchasing and
redeeming shares; expenses of preparing, printing and mailing prospectuses,
shareholder reports, notices, proxy statements and reports to shareholders,
governmental officers or commissions; brokerage and other expenses connected
with the execution, recording and settlement of portfolio security transactions;
insurance premiums; fees and expenses of the custodian for all services to the
Trust, including safekeeping of funds and securities and maintaining required
books and accounts; expenses of calculating the net asset value of shares of
each Series in the manner described in the Trust's then-current Prospectus; and
expenses of shareholder meetings.
3. Compensation of the Adviser. For the services to be rendered and the
facilities to be provided, the Trust shall pay to the Adviser a separate
investment advisory fee for each series that is to be computed and paid monthly.
Such computations shall commence on the effective date of this Agreement and
shall be calculated as follows: (i) 0.55% of the average net assets of the
Conservative Growth Series for the Trust's then-current fiscal year; (ii) 0.55%
of the average net asset of the Government Plus Series for the Trust
then-current fiscal year; and (ii) 0.25% of the average net assets of the Zero
Coupon Series for the Trust's then-current fiscal year. Payment of the foregoing
fee is subject to the provision that within 30 days following the close of any
fiscal year of each series of the Trust, the Adviser will pay to each Series a
sum equal to the amount by which the operating expenses of such series, but
excluding interest, taxes, brokerage commissions and extraordinary expenses,
incurred during such fiscal year exceed one and one-quarter percent (1.25%) of
the average net assets of such series for the fiscal year. If the Adviser shall
serve for less than the whole of any period specified in this Section 3, the
compensation to the 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 Trust as principals in making purchases or
sales of securities or other property for the account of the Trust, will not
take a long or short position in the Shares of any of the Series except as
provided by the Declaration and will comply with all other provisions of the
Declaration and By-Laws and the then-current Prospectus of the Trust 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 and management of the
Trust, 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 the
corporation itself.
6. Activities of the Adviser. The services of the Adviser to the Trust are
not to be deemed to be exclusive, MFS being free to render investment advisory
and/or other services to others. The Adviser may permit other fund clients to
use the initials "MFS" in their names. The Trust agrees that if the Adviser
shall for any reason no longer serve as the Adviser to the Trust, the Trust will
change its name so as to delete the initials "MFS". It is understood that
Trustees, officers, and shareholders of the Trust, are or may be or 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 become
interested in the Trust as a shareholder or otherwise.
7. Severability of this Agreement. If this Agreement shall be deemed or
held to be invalid of unenforceable or shall terminate with respect to any
Series, such invalidity, unenforceability or termination shall not have any
effect on this Agreement as it applied to other Series and this Agreement shall
continue in full force and effect with regard to such other Series.
8. 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 November 1, 1987 on which date it will terminate unless its
continuance after November 1, 1987 is "specifically approved at least annually"
(i) by the vote of a majority of the Trustees of the Trust who are not
"interested persons" of the Trust or of the Adviser at a meeting specifically
called for the purpose of voting on such approval, and (ii) by the Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the Trust.
This Agreement may be terminated with respect to one or more Series at any
time without the payment of any penalty by the Trustees or by "vote of a
majority of the outstanding voting securities" of the series to be terminated,
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 "vote
of a majority of the outstanding voting securities" of each Series affected
thereby.
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
Investment Company Act of 1940 and the Rules and Regulations thereunder,
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. The
undersigned Trustee of the Trust has executed this Agreement not individually,
but as Trustee under the Declaration, and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Trust, individually,
but bind only the trust estate of the Trust.
MFS/SUN LIFE SERIES TRUST
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Trustee
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Director