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EXHIBIT (5)(b)
ADDENDUM NO. 1 TO ADVISORY AGREEMENT
This Addendum, dated as of the 30th day of June, 1988, is entered into
between TRUST FOR FEDERAL SECURITIES (the "Company"), a Pennsylvania business
trust, and PROVIDENT INSTITUTIONAL MANAGEMENT CORPORATION ("PIMC"), a Delaware
corporation.
WHEREAS, the Company and PIMC have entered into an Advisory Agreement
dated March 11, 1987 (the "Advisory Agreement"), pursuant to which the Company
appointed PIMC to act as investment adviser to the Company for its FedFund
portfolio ("FedFund"), its T-Fund portfolio ("T-Fund") and its ShortFed Fund
(now, by change of name, "Short Government Fund") portfolio ("ShortFed Fund");
and
WHEREAS, Section 1(b) of the Advisory Agreement provides that in the
event the Company establishes one or more additional investment portfolios with
respect to which it desires to retain PIMC to act as the investment adviser
under the Advisory Agreement, the Company shall so notify PIMC in writing and if
PIMC is willing to render such services it shall notify the Company in writing,
and the compensation to be paid to PIMC shall be that which is agreed to in
writing by the Company and PIMC; and
WHEREAS, pursuant to Section 1(b) of the Advisory Agreement, the
Company has notified PIMC that it has established the Treasury Trust Fund
portfolio ("Treasury Trust Fund") and that it desires to retain PIMC to act as
the investment adviser therefor, and PIMC has notified the Company that it is
willing to serve as investment adviser for Treasury Trust Fund; and
WHEREAS, PIMC is willing to waive the advisory fees payable by the
Company to it for its services as investment adviser for FedFund and T-Fund to
the extent necessary to ensure that the compensation it receives for its
services as investment adviser for FedFund, T-Fund and Treasury Trust Fund is
determined on a combined average net asset basis, based on the average net
assets of each of the three portfolios, at the rate currently set forth in the
Advisory Agreement applicable to FedFund and T-Fund; and
WHEREAS, the Company and PIMC desire to restate the compensation
payable to PIMC for its services as investment adviser to FedFund, T-Fund and
Treasury Trust Fund to evidence the foregoing waiver by PIMC; and
WHEREAS, such waiver of fees is not and shall not be deemed to be an
amendment to the Advisory Agreement.
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NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Appointment. The Company hereby appoints PIMC to act as
investment adviser to the Company for Treasury Trust Fund for the period and on
the terms set forth in the Advisory Agreement. PIMC hereby accepts such
appointment and agrees to render the services set forth in the Advisory
Agreement, for the compensation herein provided.
2. Compensation. For the services provided and the expenses assumed
pursuant to the Advisory Agreement, the Company will pay PIMC from the assets
belonging to FedFund, T-Fund and Treasury Trust Fund (in proportion to each such
Portfolio's average net assets) and PIMC will accept as full compensation
therefor a fee, computed daily and payable monthly, at the following annual
rate:
.175% of the first $1 billion of the combined average net assets of
FedFund, T-Fund and Treasury Trust Fund; plus
.150% of the next $1 billion of their combined average net assets; plus
.125% of the next $1 billion of their combined average net assets; plus
.100% of the next $1 billion of their combined average net assets; plus
.095% of the next $1 billion of their combined average net assets; plus
.090% of the next $1 billion of their combined average net assets; plus
.085% of the next $1 billion of their combined average net assets; plus
.080% of their combined average net assets over $7 billion.
The fee will be reduced by one-half of the amount necessary to ensure that the
ordinary operating expenses (excluding interest, taxes, brokerage, payments to
Service Organizations pursuant to Servicing Agreements and extraordinary
expenses) of FedFund and of T-Fund and of Treasury Trust Fund do not exceed .45%
of each such Portfolio's average net assets for any fiscal year.
3. Capitalized Terms. From and after the date hereof, the term
"Portfolios" as used in the Advisory Agreement shall be deemed to include
Treasury Trust Fund. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Advisory Agreement.
4. Miscellaneous. Except to the extent supplemented hereby, the
Advisory Agreement shall remain unchanged and in full
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force and effect and is hereby ratified and confirmed in all respects as
supplemented hereby.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of
the date and year first above written.
TRUST FOR FEDERAL SECURITIES
By:
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Title:
PROVIDENT INSTITUTIONAL
MANAGEMENT CORPORATION
By:
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Title: President
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