INVESTMENT ADVISORY AND SERVICES AGREEMENT
VESTAUR SECURITIES FUND
THIS AGREEMENT, made as of the 10th day of March, 2004 by and between
VESTAUR SECURITIES FUND, a Delaware statutory trust (the "Company"), and
Evergreen Investment Management Company, LLC ("EIMC"), a Delaware limited
liability company registered as an investment advisor under the Investment
Advisers Act of 1940(the "Adviser").
In consideration of the premises and of the mutual agreements
hereinafter set forth, the Company and the Adviser agree as follows:
PART ONE
Definitions
(1) The "period of this Agreement" means the term of this Agreement and
any renewal or extension thereof, or until any prior termination thereof.
(2) The "1940 Act" means the Investment Company Act of 1940, as
amended.
(3) The "vote of the majority of the outstanding voting securities" of
the Company has the meaning contained in the 0000 Xxx.
(4) The terms "interested person", "affiliated person" and "assignment"
have the meanings contained in the 0000 Xxx.
(5) The terms "affiliated company" and "affiliated companies" means
with respect, to the Adviser, Wachovia Corporation and any corporation
controlling, controlled by or under common control with Wachovia Corporation.
PART TWO
Investment Advice and Other Services
(1) The Company hereby retains the Adviser, and the Adviser hereby
agrees, for the period of this Agreement and under the terms and conditions
hereinafter set forth, to provide or to cause to be provided administration of
the day-to-day investment operations of the Company, to furnish the Company
continuously with investment planning to provide investment advice with regard
to the Company's portfolio, to prepare and make available to the Company all
necessary research and statistical data in connection therewith and to supervise
the purchase and sale and the acquisition and disposition of specific securities
by the Company. The Adviser shall keep or cause its affiliated companies to keep
the books and financial records of the Company, and on behalf of the Company
shall compute the net asset value of the Company's shares (in accordance with
any instructions of the Board of Trustees of the Company (the "Board")) at such
times as the Board may direct. The Adviser shall furnish, to the Company and to
such other persons as the Company may direct, any statements with respect to the
net asset value per share, at such times, and in such forms, as the Company may
reasonably prescribe. The Adviser shall maintain a continuous record of all the
investments and securities which comprise the Company's portfolio and shall
furnish to the Board a resume of such portfolio, at such times, and in such
forms, as the Board may reasonably prescribe. The Adviser shall also render to
the Board a report on all matters pertaining to the services provided by the
Adviser hereunder, at such times, and in such forms, as the Board may reasonably
prescribe. The Adviser shall perform such other services as are reasonably
incidental to the foregoing duties.
The Adviser shall furnish the Company or cause its affiliated companies
to furnish the Company with the services of a person or persons satisfactory to
the Company whose duties shall include (except for the legal and auditing
aspects thereof) the supervision of the Company's financial statements and
reports, the preparation of reports to shareholders and others, and any
statements or reports required by regulatory authorities of the United States,
or states thereof in which the Company has qualified its shares for sale.
In addition, the Adviser shall furnish or cause its affiliated
companies to furnish to the Company such office space and facilities, including,
without limitation, stenographic, telephone, telegraphic, mailing, and other
facilities as may be required for the management of the affairs and business of
the Company. It is the intent of this Agreement that the Adviser shall supply
or, in the case of non-investment advisory services, cause its affiliated
companies to supply, such services as are necessary or desirable and proper for
the continuous operation of the Company. However, the Adviser shall not be
required to perform or to cause the performance of (a) those services
customarily performed by the members of the Board; (b) those services
customarily performed by the officers of the Company (except to the extent
requested, those of the Secretary of the Company); or (c) those services
customarily performed by the independent accountant, broker, dealer or
independent legal counsel.
(2) The Adviser shall arrange, if requested by the Company, for
officers and trustees of the Adviser or its affiliated companies to serve
without compensation from the Company as trustees or officers of the Company, if
duly elected to such positions by the shareholders or trustees of the Company,
or as employees of the Company. In addition, the Adviser will bear the cost of
fees, salaries or other remuneration of trustees and officers of the Company who
also serve as trustees, officers, employees or special consultants to the
Adviser or any of its affiliated companies.
(3) The Adviser covenants and agrees that in making purchases, sales,
acquisitions and dispositions of specific securities on behalf of the Company,
it shall at all times be governed by the Company's investment objectives and
policies as delineated and limited by the statements contained in the various
documents filed with the Securities and Exchange Commission (the "Commission")
as such documents may from time to time be amended (whether or not such
amendments are filed with the Commission). The Company agrees to supply the
Adviser with copies of all documents filed with the Commission, together with
any amendments thereto (whether or not such are filed with the Commission).
(4) The Adviser hereby covenants and agrees that it will make no
separate charge to any shareholders of his individual account for any service
rendered to said shareholder or the Company by the Adviser or its affiliated
companies hereunder unless such charges for special services are specifically
approved by the Board, including a majority of the trustees who are not
"interested persons" of the Adviser. No special charge will be levied
retroactively or without appropriate notice to affected shareholders.
(5) The Adviser hereby acknowledges that all records necessary in the
operation of the Company, including records pertaining to its shareholders and
investments, are the sole and exclusive property of the Company, and in the
event that a transfer of management or investment advisory services to someone
other than the Adviser should even occur, the Adviser will promptly, and at its
own cost, take all steps necessary to segregate such records and deliver them to
the Company.
(6) Subject to approval of this Agreement by the vote of a majority of
the outstanding voting securities of the Company, the Adviser hereby covenants
and agrees to cause payment or reimbursement to the Company of all fees and
expenses of the Company's Transfer Agent, Dividend Disbursing Agent, Registrar
and the Agent or Agents under the Company's Automatic Dividend Investment Plan.
PART THREE
Compensation to Investment Adviser
(1) The Company covenants and agrees to pay to the Adviser, and the
Adviser covenants and agrees to accept from the Company in full compensation,
and as the only compensation to which the Adviser shall be entitled to receive
under this Agreement, for all investment advice, material and other services
furnished, and for all facilities and equipment and for all expenses paid or
reimbursed by the Adviser hereunder, a monthly fee at an annual rate of 0.5% of
the average monthly net asset value of the Company, plus 2.5% of the net amount
on interest and dividend income after deducting interest on borrowed funds (the
"Advisory Fee"). The Advisory Fee shall be computed as of the close of business
on the last business day of each month. The Advisory Fee shall be prorated for
any fraction of a month at the commencement or termination of this Agreement.
(2) Net asset value of the Company for purposes of computing the
Advisory Fee will be determined as of the close of trading on the last business
day in each month on which the American Stock Exchange is open, and will be
computed pursuant to the provisions of the Company's Bylaws and any currently
effective Prospectus of the Company.
(3) The Advisory Fee provided for hereunder shall be paid in cash by
the Company to the Adviser within ten (10) business days after the last day of
each month and such Advisory Fee shall be adjusted, if necessary, at the time of
the payment due in the last month in the fiscal year of the Company. Any
overpayment of the Advisory Fee shall promptly be refunded to the Company.
PART FOUR
Allocation of Expenses
(1) Subject to approval of this Agreement by a majority of the
outstanding voting securities of the Company, the Adviser agrees to cause
payment or reimbursement to the Company for all its expenses during the period
of this Agreement except:
(a) fees payable to the Adviser for its services under this
Agreement;
(b) all taxes of any kind paid by the Company;
(c) all custodian or trustee fees, costs and expenses;
(d) costs and expenses in connection with the auditing and
certification of the records and accounts of the Company by the
Company's Independent certified public accountants;
(e) brokerage commissions and charges including transfer taxes
and similar taxes, incurred in acquiring and disposing of portfolio
securities;
(f) costs of obtaining and printing stock certificates,
reports to shareholders, notices, proxies, proxy statements, and also
the cost of envelopes in which such are to be mailed; provided,
however, that the Adviser shall receive no compensation for the use of
its facilities or personnel in connection with the preparation and
distribution of reports to shareholders or the preparation and
distribution of proxy material for the Company, and the Adviser shall
pay the fees of its counsel for services rendered in such connection;
(g) postage on all communications, notices and statements to
brokers, dealers, and the Company's shareholders;
(h) fees paid to trustees who are not "affiliated persons" of
the Adviser;
(i) all fees and expenses of independent legal counsel for the
Company;
(j) all stock exchange listing expenses;
(k) the cost of insurance authorized by the Board or required
of the Company by law; and
(l) expenses which from time to time may be designated as
"extraordinary" by a resolution adopted by a majority of the trustees
of the Company who are not "interested persons" of the Adviser.
PART FIVE
Multiple Capacities
Nothing contained in this Agreement shall be deemed to prohibit the
Adviser from acting, and being separately compensated for acting, in one or more
capacities on behalf of the Company. Whenever the Adviser shall be required to
act in multiple capacities on behalf of the Company, either under this Agreement
or by virtue of this and any other Agreement between the Adviser and the
Company, the Adviser shall maintain the appropriate separate accounts and
records for each such capacity. The Company understands that the Adviser or its
parent, Wachovia Corporation including any of its subsidiaries or affiliates,
may act in one or more capacities on behalf of other investment companies and
customers and the Company consents thereto. While information and
recommendations supplied to the Company shall, in the Adviser's judgment, be
appropriate under the circumstances and in light of the investment objectives
and policies of the Company, they may be different from the information and
recommendations supplied to other investment companies and customers. The
Company shall be entitled to equitable treatment under the circumstances in
receiving information, recommendations and any other services, but the Company
recognizes that it is not entitled to receive preferential treatment as compared
with the treatment given to any other investment company or customer.
PART SIX
Inconsistent Position
(1) The Adviser agrees that no officer or director of the Adviser will
deal for or on behalf of the Company with himself as principal or agent, or with
any corporation, partnership or other person in which he may have a financial
interest, except that this shall not prohibit:
(a) Officers and directors of the Adviser from having a
financial interest in the Company or in the Adviser.
(b) The purchase of securities for the Company, or the sale of
securities owned by the Company, through a security broker or dealer,
one or more of whose partners, officers or directors is an officer or a
director of the Adviser, provided such transactions are handled in the
capacity of broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
(2) If any occasion should arise in which the Adviser or any of its
officers or directors advises persons concerning the shares of the Company, the
Adviser or such officer or director will act solely on its, hers or his own
behalf and not in any way on behalf of the Company.
(3) The Adviser agrees that, except as herein otherwise expressly
provided, neither it nor any of its officers or directors shall at any time
during the period of this Agreement make, accept or receive, directly or
indirectly, any fees, profits or emoluments of any character in connection with
the purchase or sale of securities (except securities issued by the Company) or
other assets by or for the Company.
(4) Notwithstanding any other provisions of this Agreement, nothing
herein is to be construed to prevent the Adviser, subject to approval of the
Board of Trustees of the Company and compliance with applicable laws and
regulations, to serve as custodian of the Company's assets or as its transfer or
dividend disbursing agent.
PART SEVEN
Name of the Company
The Company may use the name "Vestaur" or any name derived from or
similar thereto only for so long as this Agreement or any extension, renewal or
amendment hereof remains in effect. At such time as such an agreement shall no
longer be in effect, the Company will (to the extent that it lawfully can) cease
to use such a name or any other name indicating that it is advised by or
otherwise connected with the Adviser, or an affiliate of the Adviser.
PART EIGHT
Limitation of Liability of Adviser
The Adviser shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Company in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the Adviser's part in the performance of its
duties under this Agreement. Any person, even though also employed by the
Adviser, who may be or become an employee of and paid by the Company shall be
deemed, when acting within the scope of his employment by the Company, to be
acting in such employment solely for the Company and not as the Adviser's
employee or agent.
PART NINE
Amendment
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.
PART TEN
Effectiveness, Renewal and Termination
(1) This Agreement shall become effective as of the date first written
above. Subject to its approval by a vote of the majority of the outstanding
voting securities of the Company, this Agreement shall remain in full force and
effect, subject to prior termination as provided herein, for a period of two
years from the date of such approval. This Agreement shall thereafter continue
in full force and effect from year to year, subject to prior termination as
provided herein, but only so long as its continuance shall be specifically
approved at least annually (1) by the Board or by a vote of the majority of the
outstanding voting securities of the Company, and (2) by the vote of a majority
of the trustees who are not parties to this Agreement or "interested persons" of
any such party, cast in person at a meeting called for the purpose of voting on
such approval.
(2) This Agreement may be terminated by either the Company or the
Adviser at any time by giving the other party sixty days' written notice of such
intention to terminate; provided that any such termination shall be made without
the payment of any penalty, and provided further that such termination may be
effected either by the Board or by a vote of the majority of the outstanding
voting securities of the Company.
(3) This Agreement shall terminate in the event of its "assignment."
PART ELEVEN
Nature of Relationship
The Company and the Adviser are not partners 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 either of them.
The Adviser shall be deemed to be an independent contractor and, except as
expressly provided or authorized in this Agreement, as amended, shall have no
authority to act for or represent the Company.
PART TWELVE
Notice
Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postpaid, to the party to this Agreement entitled to
receive such at such address as such other party may designate in writing mailed
for receipt of such notice.
PART THIRTEEN
Miscellaneous
(1) Neither this Agreement nor any transaction made pursuant hereto
shall be invalidated or in any way affected by the fact that trustees, officers,
agents and/or shareholders of the Company are or may be interested in the
Adviser, or any successor or assignee thereof, as trustees, officers,
shareholders or otherwise; that directors, officers, shareholders or agents of
the Adviser are or may be interested in the Company as trustees, officers,
shareholders or otherwise or that the Adviser or any successor or assignee, is
or may be interested in the Company as shareholders or otherwise provided,
however, that neither the Adviser nor any officer or director of the Adviser or
officer or trustee of the Company shall sell to or buy from the Company any
property or security other than a security issued by the Company, except in
accordance with an applicable order or exemptive rule of the Commission.
(2) This Agreement shall be subject to all applicable provisions of
law, including, without limitation, the applicable provisions of the 1940 Act
and the laws and regulations governing national banks. To the extent that any
provisions herein contained conflict with any such applicable provisions of law
and regulations, the latter shall control.
(3) This Agreement is executed and delivered in the State of Delaware
and shall be construed in accordance with the laws and decisions of said state.
(4) 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.
(5) This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which constitute one and the
same instrument.
IN WITNESS WHEREOF, the Company and the Adviser have each caused this
Agreement to be executed in duplicate in its name and on its behalf by its
undersigned duly authorized officers, or on the day and year first above
written.
ATTEST: VESTAUR SECURITIES FUND
_______________________________ By: /s/ Xxxxxxx X. Xxxxx
___________________________________
Name: Xxxxxxx X. Xxxxx
Title: Assistant Secretary
ATTEST: EVERGREEN INVESTMENT MANAGEMENT COMPANY, LLC
_______________________________ By: /s/ Xxxxxxx X. Xxxxxx
___________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
