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Exhibit 5b
XXXX XXXXXXX WORLD FUND
XXXX XXXXXXX GLOBAL RX FUND
BOSTON, MASSACHUSETTS
June 24, 1991
Xxxx Xxxxxxx Advisers, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
INVESTMENT MANAGEMENT CONTRACT
Dear Sirs:
Xxxx Xxxxxxx World Fund (the "Trust") has been organized as a business
trust under the laws of the Commonwealth of Massachusetts to engage in the
business of an investment company. The Trust's shares of beneficial interest may
be classified into series, each series representing the entire undivided
interest in a separate portfolio of assets. As of the date hereof, the Trust has
two series of shares, representing interests in World Fund - Pacific Basin
Equities Portfolio and Xxxx Xxxxxxx Global Rx Fund (the "Fund").
The Trustees of the Trust (the "Trustees") have selected Xxxx Xxxxxxx
Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Fund and to provide certain other services, as more fully set
forth below, and you are willing to provide such advice, management and services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows:
1. Delivery of Documents. The Trust has furnished you with
copies, properly certified or otherwise authenticated, of each of the following:
(a) Declaration of Trust of the Trust, dated August 25, 1986 as'
amended (the "Declaration of Trust").
(b) By-Laws of the Trust as in effect on the date hereof.
(c) Resolutions of the Trustees selecting the Adviser as the
investment adviser for the Trust and the Fund and approving the form of this
Agreement.
(d) Commitments, limitations and undertakings made by the Trust
to state "blue sky" authorities for the purpose of qualifying shares of the Fund
for sale in such states.
The Trust will furnish you from time to time with copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any.
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2. Investment and Management Services. You will use your best
efforts to provide to the Fund continuing and suitable investment programs with
respect to investments, consistent with the investment policies, objectives and
restrictions of the Fund. In the performance of the Adviser's duties hereunder,
subject always (x) to the provisions contained in the documents delivered to the
Adviser pursuant to Section 1, as each of the same may from time to time be
amended or supplemented, and (y) to the limitations set forth in the
registration statement of the Fund as in effect from time to time under the
Securities Act of 1933, as amended, the Adviser will, at its own expense:
(a) furnish the Fund with advice and recommendations, consistent
with the investment policies, objectives and restrictions of the Fund, with
respect to the purchase, holding and disposition of portfolio securities;
(b) advise the Fund in connection with policy decisions to be
made by the Trustees or any committee thereof with respect to such Fund's
investments and, as requested, furnish the Fund with research, economic and
statistical data in connection with the Fund's investments and investment
policies;
(c) provide administration of the day-to-day investment
operations of the Fund;
(d) submit such reports relating to the valuation of the Fund's
securities as the Trustees may reasonably request;
(e) assist the Fund in any negotiations relating to its
investments with issuers, investment banking firms, securities brokers or
dealers and other institutions or investors;
(f) consistent with provisions of Section 7 of this Agreement,
place orders for the purchase, sale, or exchange of portfolio securities with
brokers or dealers selected by you, provided that in connection with the placing
of such orders and the selection of such brokers or dealers you shall seek to
obtain execution and pricing within the policy guidelines determined by the
Trustees and set forth in the Prospectus and Statement of Additional Information
of the Fund as in effect from time to time;
(g) provide office space and equipment and supplies, the use of
accounting equipment when required, and necessary executive, clerical and
secretarial personnel for the administration of the affairs of the Fund;
(h) from time to time or at any time requested by the Trustees,
make reports to the Trust of your performance of the foregoing services and
furnish advice and recommendations with respect to other aspects of the business
and affairs of the Fund;
(i) maintain and preserve the records required by the Investment
Company Act of 1940, as amended, to be maintained and preserved by the Trust on
behalf of the Fund (you agree that such records are the property of the Trust
and will be surrendered to the Trust promptly upon request therefor);
(j) obtain and evaluate such information relating to economics,
industries, businesses, securities, markets and securities as you may deem
necessary or useful in the discharge of your duties hereunder;
(k) oversee and use your best efforts to assure the performance
of, the activities and services of the custodian, transfer agent and other
similar agents retained by the Trust; and
(l) give instructions to the Fund's custodian as to deliveries of
securities to and from such custodian and transfer of payment for cash for the
account of the Fund.
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3. Expenses of the Fund. You will pay:
(a) the compensation and expenses of all officers and employees
of the Fund, except those expressly paid by the Fund, either directly or by
reimbursement of the Adviser, pursuant to Section 4;
(b) the expenses of office, rent, telephone and other utilities,
office furniture, equipment, supplies and other office expenses of the Fund;
(c) any other expenses incurred by you in connection with the
performance of your duties hereunder; and
(d) premiums for such insurance as may be agreed upon by you and
the Trustees.
4. Expenses of the Trust or the Fund Not Paid by You. You will
not be required to pay any expenses which this Agreement does not expressly make
payable to you. In particular, and without limiting the generality of the
foregoing but subject to the provisions of Section 3, you will not be required
to pay:
(a) any and all expenses, taxes and governmental fees incurred by
the Trust or the Fund prior to the effective date of the Trust's Post Effective
Amendment No. 7.
(b) without limiting the generality of the foregoing clause (a),
the expenses of organizing the Fund (including without limitation legal,
accounting and auditing fees and expenses incurred in connection with the
matters referred to in the clause (b)), of initially registering the shares of
the Fund under the Securities Act of 1933, as amended, and of qualifying the
shares for sale under state securities laws for the initial offering and sale of
shares;
(c) the compensation and expenses of Trustees who are not
interested persons (as used in this Agreement such term shall have the meaning
specified in the Investment Company Act of 1940, as amended) of you, and of
independent advisers, independent contractors, consultants, managers and other
unaffiliated agents employed by the Trust or the Fund other than through you;
(d) legal, accounting and auditing fees and expenses of the Trust
or the Fund;
(e) the fees or disbursements of custodians and depositories of
the Fund's assets, transfer agents, disbursing agents, plan agents and
registrars;
(f) taxes and governmental fees assessed against the Trust's or
the Fund's assets and payable to the Trust;
(g) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of the Fund;
(h) brokers' commissions and underwriting fees; and
(i) the expenses of periodic calculations of the net asset value
of the shares of the Fund.
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(j) with respect to the Fund, the compensation, in the form of
salary, fringe benefits and incentive compensation of the Trust's Chairman of
the Board and President, the Trust's Secretary and the Trust's Compliance
Officer who provide administrative and compliance services to the Fund, the
amount of such compensation to be paid by the Fund to be determined from time to
time by the Trustees who are not interested persons, provided that such
compensation paid by the Fund will not exceed in any fiscal year 0.03% of the
average daily net asset value of the Fund during such year. Any such
compensation to be paid by the Fund will be accrued daily and, if paid by
reimbursement of the Adviser, will be paid quarterly or, if paid directly, will
be paid from time to time at intervals to be agreed upon by the Fund and the
affected officers;
5. Compensation of the Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by you as herein provided, the
Fund will pay you quarterly, a fee at the annual rate of .80% of the average
daily net asset value of the Fund during such quarter which does not exceed
$200,000,000 and 0.70% of the portion, if any, of the average daily net asset
value of the Fund during such quarter that is in excess of $200,000,000.
In the event normal operating expenses of the Fund, exclusive of
certain expenses prescribed by state law, are in excess of any limitation
imposed be a state where the Fund is registered to sell shares of beneficial
interest, the fee payable to the Adviser will be reduced to the extent of such
excess and the Adviser will make any additional arrangements necessary to
eliminate any remaining excess expenses.
7. Avoidance of Inconsistent Position. In connection with
purchases or sales of portfolio securities for the account of the Fund, neither
your not any investment management subsidiary of your, nor any of your or their
directors, officers or employees will act as principal or agent or receive any
commission. If any occasion shall arise in which you advise persons concerning
the shares of the Trust, you will act solely on your own behalf and not in any
way on behalf of the Trust or the Fund.
8. No Partnership or Joint Venture. The Trust, the Fund, and
you are not partners of or joint venturers with each other and nothing herein
shall be construed so as to make them such partners or joint venturers or impose
any liability as such on any of them.
9. Name of the Trust and Fund. The Trust and the Funds may use
the name "Xxxx Xxxxxxx" or any name derived from or similar to the name "Xxxx
Xxxxxxx Advisers, Inc." or "Xxxx Xxxxxxx Mutual Life Insurance Company" only for
so long as this Agreement remains in effect. At such time as this Agreement
shall no longer be in effect, the Trust and the Fund will (to the extent they
lawfully can) cease to use such a name or any other name indicating that the
Fund is advised by or otherwise connected with you. The Trust acknowledges that
it has adopted the name "Xxxx Xxxxxxx World Fund" and the Fund has adopted the
name "Xxxx Xxxxxxx Global Rx Fund" through permission of Xxxx Xxxxxxx Mutual
Life Insurance Company, a Massachusetts insurance company, and agrees that Xxxx
Xxxxxxx Mutual Life Insurance Company reserves to itself and any successor to
its business the right to grant the non-exclusive right to use the names "Xxxx
Xxxxxxx" or any similar name to any other corporation or entity, including but
not limited to any investment company of which Xxxx Xxxxxxx Mutual Life
Insurance Company or any
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subsidiary or affiliate thereof or any successor to the business of any thereof
shall be the investment adviser.
10. Limitation of Liability of the Adviser. You shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust or the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on your part in the performance of your duties or from reckless
disregard by you of your obligations and duties under this Agreement. Any
person, even though also employed by you, who may be or become an employee of
and paid by the Trust or the Fund shall be deemed, when acting within the scope
of his employment by the Trust or the Fund, to be acting in such employment
solely for the Trust or the Fund and not as your employee or agent.
11. Duration and Termination of this Agreement. This Agreement
shall remain in force until the second anniversary of the date upon which this
Agreement was executed by the parties hereto, and from year to year thereafter,
but only so long as such continuance is specifically approved at least annually
by (a) a majority of the Trustees who are not interested persons of you or
(other than as trustees) of the Trust, cast in person at a meeting called for
the purpose on voting on such approval, and (b) either (i) the Trustees or (ii)
a majority of the outstanding voting securities of the Fund. This Agreement may,
on 60 days' written notice, be terminated at any time without the payment of any
penalty by the Trust or the Fund by vote of a majority of the outstanding voting
securities of the Fund, or by you. Termination of this Agreement with respect to
the Fund shall not be deemed to terminate or otherwise invalidate any provisions
of any contract between you and any other series of the Trust. This Agreement
shall automatically terminate in the event of its assignment. In interpreting
the provisions of this Section 11, the definitions contained in Section 1(a) of
the Investment Company Act of 1940, as amended, (particularly the definitions of
"assignment," "interested person" or "voting security"), shall be applied.
12. 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, and no amendment, transfer,
assignment, sale, hypothecation or pledge of this Agreement shall be effective
until approved by (a) the Trustees, including a majority of the Trustees who are
not interested persons of you or (other than as Trustees) of the Trust or the
Fund, cast in person at a meeting called for the purpose of voting on such
approval, and (b) a majority of the outstanding voting securities of the Fund,
as defined in the Investment Company Act of 1940, as amended.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name Xxxx Xxxxxxx World Fund is the designation
of the Trustees under Declaration of Trust, dated August 25, 1986, as amended
from time to time. The Declaration of Trust has been filed with the Secretary of
State of the Commonwealth of Massachusetts. The obligations of the Trust and the
Fund are not personally binding upon, nor
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shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Trust or the Fund, but only
the Fund's property shall be bound. The Fund shall not be liable for the
obligations of any other series of the Trust.
Yours very truly,
XXXX XXXXXXX WORLD FUND
-- on behalf of
Xxxx Xxxxxxx Global Rx Fund
By /s/ Xxxxxx X. Xxxxxxxx, Xx.
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Chairman of the Board
and President
The foregoing contract is hereby
agreed to as of the date hereof.
XXXX XXXXXXX ADVISERS, INC.
By /s/ Xxxxxx X. Xxxxxxxx, Xx.
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Chairman of the Board
President and Chief Executive
Officer
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