EXHIBIT D
INVESTMENT ADVISORY AGREEMENT
THE PREMIUM PORTFOLIOS
BALANCED PORTFOLIO
INVESTMENT ADVISORY AGREEMENT, dated as of September 13, 1993, by and
between The Premium Portfolios, a New York trust (the "Trust"), and CITIBANK,
N.A., a national banking association ("Citibank" or the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940 (collectively with the
rules and regulations promulgated thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage the Adviser to provide certain
investment advisory services for the series of the Trust designated as Balanced
Portfolio (the "Portfolio"), and the Adviser is willing to provide such
investment advisory services for the Portfolio 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 the
Portfolio with such investment advice and supervision as the Trust may
from time to time consider necessary for the proper supervision of the
Portfolio's investment assets. Citibank shall act as the Adviser for
the Portfolio and as such 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 the
Portfolio shall be held uninvested, subject always to the restrictions
of the Trust's Declaration of Trust, dated September 13, 1993, and
Bylaws, as each may be amended from time to time (respectively, the
"Declaration" and the "By Laws"), to the provisions of the 1940 Act,
and to the then-current Registration Statement of the Trust with respect
to the Portfolio. The Adviser shall also make recommendations as to the
manner in which voting rights, rights to consent to corporate action
and any other rights pertaining to the Portfolio's securities shall be
exercised. Should the Board of Trustees of the Trust at any time,
however, make any definite determination as to investment policy
applicable to the Portfolio 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determination has been revoked.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
the Portfolio, 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 securities for the
Portfolio's account with the brokers or dealer 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 Portfolio as to deliveries of
securities and payments of cash for the account of the Portfolio. In
connection with the selection of such brokers to dealers and the
placing of such orders, the Adviser is directed to seek for the
Portfolio in it best judgment, prompt execution in an effective manner
at the most favorable price. Subject to this requirement of seeking the
most favorable price, securities may be bought from or sold to
broker-dealers who have furnished statistical, research and other
information or services to the Adviser or the Portfolio, subject to any
applicable laws, rules and regulations. In making purchases or sales of
securities or other property for the account of the Portfolio, the
Adviser may deal with itself or with the Trustees of the Trust or the
Trust' exclusive placing agent, to the extent such actions are
permitted by the 1940 Act.
2. Allocation of Charges and Expenses. The Adviser shall furnish
at its own expense all necessary services, facilities and personnel in
connection with its responsibilities under Section 1 above. It is
understood that the Trust will pay from the assets of the Portfolio all
of its own expenses allocable to the Portfolio including, without
limitation, compensation of Trustees 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,
administrator, distributor, shareholder servicing agent, registrar or
dividend disbursing agent of the Trust; expenses of issuing and
redeeming interests and servicing investor accounts; expenses of
preparing, printing and mailing, notices, proxy statements and reports
to governmental officers and commissions and to investors in the
Portfolio; expenses connected with the execution, recording and
settlement of security transactions; insurance premiums; fees and
expenses of the custodian for all services to the Portfolio, including
safekeeping of funds and securities and maintaining required books and
accounts; expenses of calculating the net asset value of the Portfolio;
and expenses of meetings of the Portfolio's investors.
3. Compensation of the Adviser. For the services to be rendered,
the Trust shall pay to the Adviser from the assets of the Portfolio an
investment advisory fee computed and paid monthly at an annual rate
equal to 0.50% of the Portfolio's average daily net assets for the
Portfolio's then-current fiscal year. If Citibank serves as Adviser for
less than the whole of any period specified in this Section 3, the
compensation to Citibank, as 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 or the Trust's
principal underwriter or distributor, as principals in making purchases
or sales of securities or other property for the account of the
Portfolio, except as permitted by the 1940 Act, will not take a long or
short position in shares of the Portfolio except as permitted by the
Declaration, and will comply with all other provisions of the
Declaration and ByLaws and the then-current Registration Statement
applicable to the Portfolio 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 of securities transactions for the Portfolio, 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 Citibank itself.
6. Activities of the Adviser. The services of the Adviser to the
Portfolio are not to be deemed to be exclusive, Citibank being free to
render investment advisory and/or other services to others. It is
understood that Trustees, officers, and investors of the Trust are or
may be or may 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 may become interested in the Trust as an
investor or otherwise.
7. 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 indefinitely, provided that its
continuance is "specifically approved at least annually" (a) 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 (b) by the Board
of Trustees of the Trust or by "vote of a majority of the outstanding
voting securities" of the Portfolio.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities of the Portfolio, 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 the
"vote of a majority of the outstanding voting securities" of the Portfolio.
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
1940 Act, 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.
Each party acknowledges and agrees that all obligations of the Trust under
this Agreement are binding only with respect to the Portfolio; that any
liability of the Trust under this Agreement with respect to the Portfolio, or
in connection with the transactions contemplated herein with respect to the
Portfolio, shall be discharged only out of the assets of the Portfolio; and
that no other series of the Trust shall be liable with respect to this
Agreement or in connection with the transactions contemplated herein.
The undersigned Trustee or officer of the Trust has executed this
Agreement not individually, but as Trustee or officer under the Trust's
Declaration of Trust, dated September 13, 1993, as amended, and the obligations
of this Agreement are not binding upon any of the Trustees or officers of the
Trust individually.
THE PREMIUM PORTFOLIOS CITIBANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Title: President Title: Vice President
