Exhibit 5
NATIONAL MULTI-SECTOR FIXED INCOME FUND, INC.
MANAGEMENT AGREEMENT
AGREEMENT made this 14th day of May, 1993 by and between NATIONAL
MULTI-SECTOR FIXED INCOME FUND, INC., a Maryland corporation (the "Fund"), and
NATIONAL SECURITIES & RESEARCH CORPORATION, a New York corporation (the
"Manager").
The Fund is a diversified open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act").
The Fund desires to retain the Manager to render investment advisory
services to the Fund, to administer the Fund's day-to-day corporate affairs and
to make available to the Fund certain facilities of the Manager, and the Manager
is willing to render such investment advisory and administrative services and
provide the use of such facilities.
The parties agree as follows:
1. The Fund hereby appoints the Manager to act as manager of the Fund and
administrator of its business affairs for the period and on the terms set forth
in this Agreement. The Manager accepts such appointment and agrees to render the
services described, for the compensation provided, in this Agreement.
2. Subject to the supervision of the Board of Directors of the Fund, the
Manager shall administer the Fund's corporate affairs and furnish the Fund with
office facilities and with clerical, bookkeeping and recordkeeping services at
such office facilities, and the Manager shall manage the investment operations
of the Fund and the composition of the Fund's portfolio, including the purchase
and retention and disposition of portfolio securities, in accordance with the
Fund's investment objectives, policies and restrictions as stated in the Fund's
Prospectus and Statement of Additional Information (as defined below) subject to
the following understandings:
(a) The Manager shall provide supervision of the Fund's investments
and determine from time to time what investments will be made, held or disposed
of or what securities will be purchased, retained, sold or loaned by the Fund,
and what portion of the assets will be invested or held uninvested as cash.
(b) The Manager shall use its best judgment in the performance of
its duties under this Agreement.
(c) The Manager, in the performance of its duties and obligations
under this Agreement, shall (i) act in conformity with the Articles of
Incorporation, By-Laws, Prospectus and Statement of
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Additional Information of the Fund, and with the instructions and directions of
the Board of Directors of the Fund and (ii) conform to and comply with the
requirements of the Investment Company Act and all other applicable federal and
state laws and regulations.
(d) (i) The Manager shall determine the securities to be purchased
or sold by the Fund and will place orders pursuant to its determinations with or
through such persons, brokers or dealers to carry out the policy with respect to
brokerage as set forth in the Fund's Prospectus and Statement of Additional
Information or as the Board of Directors may direct from time to time. In
providing the Fund with investment supervision, the Manager will give primary
consideration to securing the most favorable price and efficient execution. The
Manager may also consider the financial responsibility, research and investment
information and other services and research related products provided by brokers
or dealers who may effect or be a party to any such transactions or other
transactions to which other clients of the Manager may be a party. The Fund
recognizes that the services and research related products provided by such
brokers may be useful to the Manager in connection with its services to other
clients.
(ii) When the Manager deems the purchase or sale of a security
to be in the best interest of the Fund as well as other clients, the Manager, to
the extent permitted by applicable laws and regulations, may aggregate the
securities to be sold or purchased in order to obtain the most favorable price
or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transactions, will be made by the Manager in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Fund and to such other clients.
(e) The Manager shall maintain, or cause to be maintained, all
books and records required under the Investment Company Act to the extent not
maintained by the custodian of the Fund. The Manager shall render to the Fund's
Board of Directors such periodic and special reports as the Directors may
reasonably request.
(f) The Manager shall provide the Fund's custodian on each business
day information relating to all transactions concerning the Fund's assets.
(g) The investment management services of the Manager to the Fund
under this Agreement are not to be deemed exclusive, and the Manager shall be
free to render similar services to others.
3. The Fund has delivered to the Manager copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:
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(a) Articles of Incorporation, as amended, as filed with the State
Department of Assessments and Taxation of Maryland (such Articles of
Incorporation, as in effect on the date hereof and as further amended from time
to time, are herein called the "Articles of Incorporation");
(b) By-Laws of the Fund (such By-Laws, as in effect on the date
hereof and as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Board of Directors of the Fund
authorizing the appointment of the Manager and approving this Agreement;
(d) Registration Statement on Form N-1A under the Investment
Company Act and the Securities Act of 1933, as amended from time to time (the
"Registration Statement"), as filed with the Securities and Exchange Commission
(the "Commission"), relating to the Fund and shares of the Fund's Common Stock
and all amendments thereto;
(e) Notification of Registration of the Fund under the Investment
Company Act on Form N-8A as filed with the Commission and all amendments
thereto; and
(f) Prospectus and Statement of Additional Information included in
the Registration Statement, as amended from time to time. All references in this
Agreement to Prospectus and Statement of Additional Information shall be to such
documents as most recently amended or supplemented and in effect.
4. The Manager shall authorize and permit any of its directors, officers
and employees who may be elected as directors or officers of the Fund to serve
in the capacities in which they are elected. All services to be furnished by the
Manager under this Agreement may be furnished through such directors, officers
or employees of the Manager.
5. The Manager agrees that all records which it maintains for the Fund are
property of the Fund. The Manager will surrender promptly to the Fund any such
records upon the Fund's request. The Manager further agrees to preserve such
records for the periods prescribed in Rule 31a-2 of the Commission under the
Investment Company Act.
6. (i) In connection with the services rendered by the Manager under this
Agreement, the Manager will pay all of the following expenses:
(a) the salaries and expenses of all personnel of the Fund and the
Manager except the fees of the directors who are not affiliated persons of the
Manager; and
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(b) all expenses incurred by the Manager or by the Fund in
connection with managing the ordinary course of the Fund's business other than
those assumed by the Fund.
(ii) The Fund will pay the following:
(a) the fees and expenses of directors who are not affiliated
persons of the Manager;
(b) the fees and expenses of the custodian that relate to (I) the
custodial function and recordkeeping connected with such function, (II) fund
accounting services, (III) the providing of records to the Manager useful to the
Manager in connection with the Manager's obligation to maintain the required
accounting records of the Fund, (IV) the pricing of shares of the Fund,
including the cost of any pricing services which may be retained pursuant to the
authorization of the Board of Directors of the Fund, and (V) for both mail and
wire orders, the cashiering function in connection with the issuance and
redemption of the Fund's securities;
(c) the fees and expenses of the Fund's transfer agent, which may
be the custodian, that relate to the maintenance of each shareholder account;
(d) the charges and expenses of legal counsel and independent
accountants for the Fund and directors who are not affiliated persons of the
Manager;
(e) brokers' commissions and any issue or transfer taxes chargeable
to the Fund in connection with its securities transactions;
(f) all taxes and corporate fees payable by the Fund to the
federal, state or other governmental agencies;
(g) the fees of any trade association of which the Fund may be a
member;
(h) the cost of stock certificates representing, and non-negotiable
share deposit receipts evidencing, shares of the Fund;
(i) the fees and expenses involved in registering and maintaining
registration of the shares of the Fund with the Securities and Exchange
Commission, registering the Fund as a broker or dealer and qualifying shares of
the Fund under state securities laws, including the preparation and printing of
the Fund's registration statement and prospectus for filing under federal and
state securities laws for such purposes;
(j) communications expenses with respect to investor services and
all expenses of shareholders' and directors' meetings
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and of preparing, printing and mailing reports to shareholders in the amount
necessary for distribution to shareholders;
(k) insurance, litigation and indemnification expenses; and
(l) other extraordinary expenses not incurred in the ordinary
course of the Fund's business.
7. In the event the expenses of the Fund for any fiscal year (including the
fees payable to the Manager but excluding interest, taxes, brokerage
commissions, distribution fees and litigation and indemnification expenses and
other extraordinary expenses not incurred in the ordinary course of the Fund's
business) exceed the lowest applicable annual expense limitation established
pursuant to the statutes or regulations of any jurisdictions in which shares of
the Fund are then qualified for offer and sale, the compensation due the Manager
will be reduced by the amount of such excess, or, if such reduction exceeds the
compensation payable to the Manager, the Manager will pay the Fund the amount of
such reduction which exceeds the amount of such compensation.
8. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Manager as compensation a fee at the annual
rate of .70% of the first $500,000,000, .55% of the next $250,000,000, and .45%
of the excess over $750,000,000 of the Fund's daily net assets, computed daily
and paid monthly.
9. The Manager may rely on information reasonably believed by it to be
accurate and reliable. Neither the Manager nor its officers, directors,
employees or agents or controlling persons shall be liable for any error or
judgment or mistake of law, or for any loss suffered by the Fund in connection
with or arising out of the matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Manager in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement .
10. This Agreement shall continue in effect for a period of two years from
the date hereof and shall continue in effect thereafter for so long as such
continuance is specifically approved at least annually by the affirmative vote
of (i) a majority of the Fund's Board of Directors, who are not interested
persons of the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) a majority of the Fund's Board of Directors or
the holders of a majority of the outstanding voting securities of the Fund;
provided however, that this Agreement may be terminated by the Fund, 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 (as defined in the Investment
Company Act) of the Fund, or by the Manager at any time, without the
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payment of any penalty, on not more than 60 days' nor less than 30 days' written
notice to the other party. This Agreement shall terminate automatically in the
event of its assignment provided that a transaction which does not, under the
Investment Company Act, result in a change of actual control or management of
the Manager's business shall not be deemed to be an assignment for the purposes
of this Agreement.
11. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Manager who may also be a trustee, officer
or employee of the Fund to engage in any other business or to devote his time
and attention in part to the management or other aspect of any business, whether
of a similar or dissimilar nature, and shall not limit or restrict the right of
the Manager to engage in any other business or to render services of any kind to
any other person or entity.
12. During the term of this Agreement, the Fund agrees to furnish the
Manager at its principal office all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
shareholders of the Fund or the public, which refer in any way to the Manager,
prior to use thereof and not to use such material if the Manager reasonably
objects in writing within five business days (or such other time as may be
mutually agreed) after receipt. In the event of termination of the Agreement,
the Fund will continue to furnish to the Manager such other information relating
to the business affairs of the Fund as the Manager at any time, or from time to
time, reasonably requests in order to discharge its obligations hereunder.
13. This Agreement may be amended by mutual agreement, but only after
authorization of such amendments by the affirmative vote of (i) the holders of
the majority of the outstanding voting securities of the Fund and (ii) a
majority of the members of the Fund's Board of Directors who are not interested
persons of the Fund or the Manager, cast in person at a meeting called for the
purpose of voting on such approval.
14. The Manager and the Funds each agree that the name "National" is
proprietary to, and a property right of, the Manager. The Fund agrees and
consents that (i) it will only use the name "National" as part of its name and
for no other purpose, (ii) it will not purport to grant any third party the
right to use the name "National" and (iii) upon the termination of this
Agreement, the Fund shall, upon the request of the Manager, cease to use the
name "National", and shall use its best efforts to cause its officers, directors
and shareholders to take any and all actions which the Manager may request to
effect the foregoing.
15. Any notice or other communications required to be given pursuant to
this Agreement shall be deemed to be given if delivered or mailed by registered
mail, postage paid, (1) to the Manager at
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Xxx Xxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000, Attention: Secretary; or (2) to the
Fund, Xxx Xxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000, Attention: Secretary.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. The terms "interested person," "assignment,"
and "vote of the majority of the outstanding securities" shall have the meaning
set forth in the Investment Company Act.
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 written
above.
NATIONAL MULTI-SECTOR FIXED INCOME FUND, INC.
By: /s/ Xxxxxx Xxx Dial
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Xxxxxx Xxx Dial, Vice President
Attest:
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Assistant Secretary
NATIONAL SECURITIES & RESEARCH CORPORATION
By: /s/ Xxxxx XxXxxxx
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Xxxxx XxXxxxx, Senior Vice President and
Chief Financial Officer
Attest:
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Assistant Secretary
natl\xxxxx.xxx
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