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EXHIBIT 99.B5(a)
INVESTMENT MGMT. AG. - ▇▇▇▇▇▇ ▇▇▇. FUND SERIES
INVESTMENT MANAGEMENT AGREEMENT
[▇▇▇▇▇▇ Retirement Fund Series]
AGREEMENT made this 4th day of January, 1996, by and between ▇▇▇▇▇▇ TARGET
EQUITY FUND, a Massachusetts business trust (the "Fund"), and ▇▇▇▇▇▇ FINANCIAL
SERVICES, INC., a Delaware corporation (the "Adviser").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, the shares of beneficial interest
("Shares") of which are registered under the Securities Act of 1933;
WHEREAS, the Fund is authorized to issue Shares in separate series or
portfolios with each representing the interests in a separate portfolio of
securities and other assets;
WHEREAS, the Fund wants to retain the Adviser under this Agreement to
render investment advisory and management services to the portfolios of the
Fund known as ▇▇▇▇▇▇ Retirement Fund Series I, ▇▇▇▇▇▇ Retirement Fund Series
II, ▇▇▇▇▇▇ Retirement Fund Series III, ▇▇▇▇▇▇ Retirement Fund Series IV, ▇▇▇▇▇▇
Retirement Fund Series V and ▇▇▇▇▇▇ Retirement Fund Series VI (the "Initial
Portfolios"), together with any other Fund portfolios which may be established
later and served by the Adviser hereunder, being herein referred to
collectively as the "Portfolios" and individually referred to as a "Portfolio";
and
WHEREAS, the Adviser is willing to render such investment advisory and
management services for the Initial Portfolios;
NOW THEREFORE, 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
the Initial Portfolios and other Portfolios hereunder and to manage the
investment and reinvestment of the assets of each such Portfolio in accordance
with the applicable investment objectives and policies and limitations, and to
administer the affairs of each such Portfolio to the extent requested by and
subject to the supervision of the Board of Trustees of the Fund for the period
and upon the terms herein set forth, and to place orders for the purchase or
sale of portfolio securities for the Fund's account with brokers or dealers
selected by it;
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and, in connection therewith, the Adviser is authorized as the agent of the
Fund to give instructions to the Custodian of the Fund as to the deliveries of
securities and payments of cash for the account of the Fund. In connection
with the selection of such brokers or dealers and the placing of such orders,
the Adviser is directed to seek for the Fund best execution of orders. Subject
to such policies as the Board of Trustees of the Fund determines, 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 Fund 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 clients of the Adviser
as to which the Adviser exercises investment discretion. The Fund recognizes
that all research services and research that the Adviser receives or generates
are available for all clients, and that the Fund and other clients may benefit
thereby. The investment of funds shall be subject to all applicable
restrictions of the Agreement and Declaration of Trust and By-Laws of the Fund
as may from time to time be in force.
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 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 or
represent the Fund in any way or otherwise be deemed an agent of the Fund. It
is understood and agreed that the Adviser, by separate agreements with the
Fund, may also serve the Fund in other capacities.
2. In the event that the Fund establishes one or more portfolios other than
the Initial Portfolios with respect to which it desires to retain the Adviser
to render investment advisory and management services hereunder, it shall
notify the Adviser in writing. If the Adviser is willing to render such
services, it shall notify the Fund in writing whereupon such portfolio or
portfolios shall become a Portfolio or Portfolios hereunder.
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3. For the services and facilities described in Section 1, the Fund will pay
to the Adviser at the end of each calendar month, an investment management fee
computed at an annual rate of .50 of 1% of the combined average daily net
assets of the Portfolios. The fee as computed above shall be computed
separately for, and charged as an expense of, each Portfolio based upon the
average daily net assets of such Portfolio. 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 is in effect
during the month and year, respectively.
4. 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.
5. In addition to the fee of the Adviser, the Fund shall assume and pay any
expenses for services rendered by a custodian for the safekeeping of the Fund's
securities or other property, for keeping its books of account, for any other
charges of the custodian, and for calculating the net asset value of the Fund
as provided in the prospectus of the Fund. The Adviser shall not be required
to pay and the Fund shall assume and pay the charges and expenses of its
operations, including compensation of the trustees (other than those affiliated
with the Adviser), charges and expenses of independent auditors, of legal
counsel, of any transfer or dividend disbursing agent, and of any registrar of
the Fund, costs of acquiring and disposing of portfolio securities, interest,
if any, on obligations incurred by the Fund, costs of share certificates and of
reports, membership dues in the Investment Company Institute or any similar
organization, costs of reports and notices to shareholders, other like
miscellaneous expenses and all taxes and fees payable to federal, state or
other governmental agencies on account of the registration of securities issued
by the Fund, filing of trust documents or otherwise. The Fund shall not pay or
incur any obligation for any expenses for which the Fund intends to seek
reimbursement from the Adviser as herein provided without first obtaining the
written approval of the Adviser. The Adviser shall arrange, if desired by the
Fund, 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.
If expenses borne by the Fund for those Portfolios which the Adviser
manages in any fiscal year (including the
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Adviser's fee, but excluding interest, taxes, fees incurred in acquiring and
disposing of portfolio securities, distribution services fees, extraordinary
expenses and any other expenses excludable under state securities law
limitations) exceed any applicable limitation arising under state securities
laws, the Adviser will reduce its fee or reimburse the Fund for any excess to
the extent required by such state securities laws. If for any month the
expenses of the Fund properly chargeable to the income account shall exceed
1/12 of the percentage of average net assets allowable as expenses, the payment
to the Adviser for that month shall be reduced and if necessary the Adviser
shall make a refund payment to the Fund so that the total net expense will not
exceed such percentage. As of the end of the Fund's fiscal year, however, the
foregoing computations and payments shall be readjusted so that the aggregate
compensation payable to the Adviser for the year is equal to the percentage
calculated in accordance with Section 3 hereof of the average net asset value
as determined as described herein throughout the fiscal year, diminished to the
extent necessary so that the total of the aforementioned expense items of the
Fund shall not exceed the expense limitation. The aggregate of repayments, if
any, by the Adviser to the Fund for the year shall be the amount necessary to
limit the said net expense to said percentage in accordance with the foregoing.
The net asset value for each Portfolio shall be calculated in accordance
with the provisions of the Fund's prospectus or as the trustees may determine
in accordance with the provisions of the Investment Company Act of 1940. On
each day when net asset value is not calculated, the net asset value of a
Portfolio shall be deemed to be the net asset value of such Portfolio as of the
close of business on the last day on which such calculation was made for the
purpose of the foregoing computations.
6. Subject to applicable statutes and regulations, it is understood that
trustees, officers 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 a trustee, officer or agent.
7. The Adviser shall not be liable for any error of judgment or of law or for
any loss suffered by the Fund in connection with the matters to which this
Agreement relates, except loss resulting from willful misfeasance, bad faith or
gross negligence on the part of the Adviser in the performance of its
obligations and duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
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8. This Agreement shall become effective with respect to the Initial
Portfolios on the date hereof and shall remain in full force until April 1,
1996, unless sooner terminated as hereinafter provided. This Agreement shall
continue in force from year to year thereafter with respect to each Portfolio,
but only as long as such continuance is specifically approved for each
Portfolio at least annually in the manner required by the Investment Company
Act of 1940 and the rules and regulations thereunder; provided, however, that
if the continuation of this Agreement is not approved for a Portfolio, the
Adviser may continue to serve in such capacity for such Portfolio in the manner
and to the extent permitted by the Investment Company Act of 1940 and the rules
and regulations thereunder.
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 on sixty (60) days written notice to the other
party. The Fund may effect termination with respect to any Portfolio by action
of the Board of Trustees or by vote of a majority of the outstanding voting
securities of such Portfolio.
This Agreement may be terminated with respect to any Portfolio at any time
without the payment of any penalty by the Board of Trustees or by vote of a
majority of the outstanding voting securities of such Portfolio 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.
The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the Investment Company Act of
1940 and the rules and regulations thereunder.
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
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9. 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.
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 the receipt of such notice.
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11. All parties hereto are expressly put on notice of the Fund's Agreement and
Declaration of Trust and all amendments thereto, all of which are on file with
the Secretary of The Commonwealth of Massachusetts, and the limitation of
shareholder and trustee liability contained therein. This Agreement has been
executed by and on behalf of the Fund by its representatives as such
representatives and not individually, and the obligations of the Fund hereunder
are not binding upon any of the trustees, officers, or shareholders of the Fund
individually but are binding upon only the assets and property of the Fund.
With respect to any claim by the Adviser for recovery of that portion of the
investment management fee (or any other liability of the Fund arising
hereunder) allocated to a particular Portfolio, whether in accordance with the
express terms hereof or otherwise, the Adviser shall have recourse solely
against the assets of that Portfolio to satisfy such claim and shall have no
recourse against the assets of any other Portfolio for such purpose.
12. This Agreement shall be construed in accordance with applicable federal
law and (except as to Section 11 hereof which shall be construed in accordance
with the laws of The Commonwealth of Massachusetts) the laws of the State of
Illinois.
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13. This Agreement is the entire contract between the parties relating to the
subject matter hereof and supersedes all prior agreements between the parties
relating to the subject matter hereof.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed as of the day and year first above written.
▇▇▇▇▇▇ TARGET EQUITY FUND
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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ATTEST:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Secretary
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▇▇▇▇▇▇ FINANCIAL SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Senior Vice President
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ATTEST:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Title: Assistant Secretary
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