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EXHIBIT 5.1
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of November 1, 1994 between MASTER INVESTMENT
TRUST SERIES I, a Delaware business trust (herein called the "Trust"), and Bank
of America National Trust and Savings Association (the "Adviser").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Adviser currently furnishes investment advisory services
to the Trust's Asset Allocation, Investment Grade Bond, Blue Chip, International
Equity, International Bond, Growth and Income, Short-Term Government, Utilities
and Corporate Bond Funds pursuant to an investment advisory agreement dated as
of October 25, 1993, as amended (the "Old Advisory Agreement");
WHEREAS, the Trust desires to terminate the Old Advisory Agreement as
it relates to the Asset Allocation, Investment Grade Bond, Blue Chip,
International Equity, International Bond, Growth and Income, Short-Term
Government and Utilities Funds;
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory services to the Trust's Asset Allocation, Investment Grade Bond, Blue
Chip, International Equity, International Bond, Growth and Income, Short-Term
Government and Utilities Funds (individually a "Fund" and together the "Funds");
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Termination. The Old Advisory Agreement is terminated as it relates
to the Asset Allocation, Investment Grade Bond, Blue Chip, International Equity,
International Bond, Growth and Income, Short-Term Government and Utilities Funds
effective as of the date hereof.
2. Appointment.
(a) The Trust hereby appoints the Adviser to act as investment
adviser to the Funds 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. The Adviser may,
in its discretion, provide such services through its own employees or the
employees of one or more affiliated companies that are qualified to act as
investment adviser to the Trust under applicable law and are under the common
control of BankAmerica
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Corporation provided (i) that all persons, when providing services hereunder,
are functioning as part of an organized group of persons, and (ii) that such
organized group of persons is managed at all times by authorized officers of the
Adviser.
(b) In the event that the Trust establishes one or more
investment portfolios other than the Initial Funds with respect to which it
desires to retain the Adviser to act as investment adviser hereunder, it shall
notify the Adviser in writing. If the Adviser is willing to render such services
under this Agreement it shall so notify the Trust in writing whereupon such
investment portfolio shall become a "Fund" hereunder and shall be subject to the
provisions of this Agreement to the same extent as the Initial Funds except to
the extent that said provisions (including those relating to the compensation
payable by the Fund to the Adviser) are modified with respect to such Fund in
writing by the Trust and the Adviser at the time.
3. Services. Subject to the supervision of the Trust's Board of
Trustees (the "Board"), the Adviser, in consultation with any Sub-Adviser
appointed pursuant to Section 4 hereof with respect to a particular Fund, will
provide a continuous investment program for each of the Funds, including
investment research and management with respect to all securities and
investments and cash equivalents in the Funds. The Adviser will determine from
time to time what securities and other investments will be purchased, retained
or sold by the Trust with respect to each Fund. The Adviser will provide the
services under this Agreement in accordance with each Fund's investment
objective, policies and restrictions as stated in the Fund's registration
statement, as from time to time amended, and resolutions of the Board. 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 other applicable law,
including but not limited to banking law.
(b) Will review, monitor and report to the Board of Trustees
regarding the performance and investment procedures of any Sub-Adviser (as
defined in Section 4 of this Agreement).
(c) Will assist and consult with any Sub-Adviser appointed
with respect to a particular Fund in connection with that Fund's continuous
investment program (as defined in Section 4 of this Agreement).
(d) Will place all orders for the purchase and sale of
portfolio securities for the account of each Fund with brokers or dealers
selected by the Adviser. In executing portfolio transactions and selecting
brokers or dealers, the Adviser will
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use its best efforts to seek on behalf of the Trust and each Fund the best
overall terms available. In assessing the best overall terms available for any
transaction the Adviser shall consider all factors it deems relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In evaluating the best overall terms available, and in
selecting the broker or dealer to execute a particular transaction, the Adviser
may also consider the brokerage and research services (as those terms are
defined in Section 28(c) of the Securities Exchange Act of 1934, as amended)
provided to any Fund and/or other accounts over which the Adviser or any
affiliate of the Adviser exercises investment discretion. The Adviser is
authorized, subject to the prior approval of the Board, to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of that particular
transaction or in terms of the overall responsibilities of the Adviser to the
particular Fund and to the Trust. In no instance will portfolio securities be
purchased from or sold to the Adviser, any Sub-Adviser or Concord Holding
Corporation, the Trust's administrator (the "Administrator"), or an affiliated
person of any of them acting as principal or as broker, except as permitted by
law. In executing portfolio transactions for any Fund, the Adviser may, but
shall not be obligated to, to the extent permitted by applicable laws and
regulations, aggregate the securities to be sold or purchased with those of
other Funds and its other clients where such aggregation is not inconsistent
with the policies set forth in the Trust's registration statement. In such
event, the Adviser will allocate the securities so purchased or sold, and the
expenses incurred in the transaction, in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Funds and such
other clients.
In performing the investment advisory services hereunder, the Adviser
is authorized to purchase, sell or otherwise deal with securities or other
instruments for which (a) Bank of America National Trust and Savings
Association, (b) any affiliate of Bank of America National Trust and Savings
Association, (c) an entity in which Bank of America National Trust and Savings
Association has a direct or indirect interest, or (d) another member of a
syndicate or other intermediary (where an entity referred to in (a), (b) or (c)
above was a member of the syndicate), has acted, now acts or in the future will
act as an underwriter, syndicate member, market-maker, dealer, broker or in
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any other similar capacity, whether the purchase, sale or other dealing occurs
during the life of the syndicate or after the close of the syndicate, provided
such purchase, sale or dealing is permitted under the Investment Company Act of
1940 and the rules thereunder. Insofar as permitted by law any rules of or under
applicable law prohibiting or restricting in any way an agent or fiduciary from
dealing with itself or from dealing with respect to any matter in which it may
or does have a personal interest shall not apply to the Adviser, to the extent
its actions are authorized under this paragraph.
(e) Will maintain all books and records with respect to the
securities transactions for the Funds, keep books of account with respect to
such Funds and furnish the Board such periodic special reports as the Board may
request.
(f) Will maintain a policy and practice of conducting its
investment advisory operations independently of its commercial banking
operations. When the Adviser makes investment recommendations for a Fund, its
investment advisory personnel will not inquire or take into consideration
whether the issuer of securities proposed for purchase or sale for the Fund's
account are customers of its commercial department. In dealing with commercial
customers, the Adviser's commercial department will not inquire or take into
consideration whether securities of those customers are held by the Funds.
(g) Will treat confidentially and as proprietary information
of the Trust all records and other information relative to the Trust and prior
or present Trust interestholders ("Investors") or those persons or entities who
respond to inquires concerning investment in the Trust, and will not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder or under any other agreement with the
Trust except after prior notification to and approval in writing by the Trust,
which approval shall 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 Trust. Nothing contained herein,
however, shall prohibit the Adviser from advertising to or soliciting the public
generally with respect to other products or services, including, but not limited
to, any advertising or marketing via radio, television, newspapers, magazines or
direct mail solicitation, regardless of whether such advertisement or
solicitation may coincidentally include prior or present Trust Investors or
those persons or entities who have responded to inquiries regarding the Trust.
4. Sub-Adviser. It is understood that the Adviser may from time to time
employ or associate with itself such person or
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persons as the Adviser believes to be fitted to assist it in the performance of
this Agreement (each a "Sub-Adviser"); provided, however, that the compensation
of such person or persons shall be paid by the Adviser and that the Adviser
shall be as fully responsible to the Trust for the acts and omissions of any
such person as it is for its own acts and omissions; and provided further, that
the retention of any Sub-Adviser shall be approved as may be required by the
1940 Act. Additionally, in the event that any Sub-Adviser appointed hereunder is
terminated, the Adviser may provide investment advisory services pursuant to
this Agreement to the Funds without further shareholder approval.
5. Services Not Exclusive. The Adviser will for all purposes herein be
deemed to be an independent contractor and will, unless otherwise expressly
provided herein or authorized by the Board from time to time, have no authority
to act for or represent the Trust in any way or otherwise be deemed its agent.
The investment management services furnished by the Adviser hereunder are not
deemed exclusive, and the Adviser will be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
6. 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 the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any such records upon the Trust'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 31-1 under the
1940 Act.
7. Expenses. During the term of this Agreement, the Adviser will pay
all expenses incurred by it in connection with its activities under the
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Trust.
8. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Trust 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: .25% of the net assets of the Short-Term
Government Fund; .45% of the net assets of the Investment Grade Bond Fund; .50%
of the net assets of the Utilities Fund; .55% of the net assets of the Asset
Allocation, International Bond and Growth and Income Funds, and .75% of the net
assets of the Blue Chip and International Equity Funds. Such fee as is
attributable to each Fund will be a separate charge to each such Fund and will
be the several (and not joint or joint and several obligation of each such Fund.
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If in any fiscal year the aggregate of (i) the pro rata share of the
total expenses of any Fund borne by an Investor in such Fund which is a
registered investment company (as such expenses are defined under the securities
regulations of any state having jurisdiction over such Investor), plus (ii) the
expenses borne by such Investor in connection with such Investor's operations as
a registered investment company (as defined under such regulations), exceed the
expense limitations of any such state, the Adviser will reimburse the Fund for
such excess expenses. The obligation of the Adviser to reimburse any Fund
hereunder is limited in any fiscal year to the amount of its fee hereunder for
such fiscal year with respect to such Fund; provided, however, that
notwithstanding the foregoing, the Adviser will reimburse any Fund for 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 and accrued daily and paid on a monthly basis.
9. Limitation of Liability. Subject to the provisions of Section 4
hereof concerning the Adviser's responsibility for the acts and omissions of
persons employed by or associated with the Adviser, the Adviser will not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust 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 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.
10. Duration and Termination. This Agreement will become effective as
of the date first above written. This Agreement will become effective with
respect to any additional Fund on the date of receipt by the Trust of notice
from the Adviser in accordance with Section 1(b) hereof that the Adviser is
willing to serve as investment adviser with respect to such Fund, provided that
this Agreement (as supplemented by the terms specified in any notice and
agreement pursuant to Section 1(b) hereof) shall have been approved by the
Investors of the Funds in accordance with the requirements of the 1940 Act.
Unless sooner terminated as provided herein, this Agreement will
continue in effect until October 31, 1995. Thereafter, if not terminated, this
Agreement shall continue in effect as to a particular Fund for successive annual
periods, provided such continuance is specifically approved at least annually
(a) by the vote of a majority of those members of the Board 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,
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and (b) by the Board or by vote of a majority of the outstanding voting
securities of such Fund. Notwithstanding the foregoing, this Agreement may be
terminated as to any Fund at any time, without the payment of any penalty, by
the Trust (by vote of the Board or by vote of a majority of the outstanding
voting securities of such Fund), 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
voting securities," "interested persons" and "assignment" shall have the same
meaning as the meaning of such terms in the 1940 Act.)
11. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement will be
effective as to a particular Fund until approved by vote of a majority of the
outstanding voting securities of such Fund.
12. Notices. Notices of any kind to be given to the Adviser hereunder
by the Trust will be in writing and will be duly given if mailed or delivered to
the Adviser at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000. Attention: Xxxxxx X. Xxxxx, Vice President, or at such other address or
to such individual as will be so specified by the Adviser. Notices of any kind
to be given to the Trust hereunder by the Adviser will be in writing and will be
duly given if mailed or delivered to the Trust at X.X. Xxx 000, Xxxxx Xxxxxx,
Xxxxxx Xxxxxxx, Xxxxxxx Xxxx Indies Attention: Xxxxxxx X. Xxxxxxxxx, President,
or at such other address or to such individual as will be so specified by the
Trust to the Adviser.
13. Names. The names "Master Investment Trust, Series I" and "Trustees
of Master Investment Trust, Series I" refer respectively to the Trust created
and the Trustees, as trustees but not individually or personally, acting from
time to time under a Declaration of Trust dated October 23, 1992, as amended and
restated on February 10, 1993, which is hereby referred to and a copy of which
is on file at the principal office of the Trust. The Trustees, officers,
employees and agents of the Trust shall not personally be bound by or liable
under any written obligation, contract, instrument, certificate or other
interest or undertaking of the Trust made by the Trustees or by an officer,
employee or agent of the Trust, in his or her capacity as such, nor shall resort
be had to their private property for the satisfaction of any obligation or claim
thereunder.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall
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be held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement will not be affected thereby. This Agreement will be
binding upon and will inure to the benefit of the parties hereto and their
respective successors and will be governed by the internal laws, and not the law
of conflicts, of the State of Delaware; provided that nothing herein will be
construed in a manner inconsistent with the 1940 Act, the Investment Advisers
Act of 1940, as amended, or any rule or regulation of the Securities and
Exchange Commission thereunder. This Agreement may be executed in two or more
parts which together shall constitute a single Agreement.
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.
MASTER INVESTMENT TRUST, SERIES I
By: /s/ Xxxxxx Xxxxxx
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Title: Executive Vice President,
Treasurer and Secretary
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: signature illegible
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Title:
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