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Exhibit 5(a)
PAX WORLD GROWTH FUND, INC.
000 XXXXX XXXXXX
XXXXXXXXXX, XX 00000
_______________, 1997
Pax World Management Corp.
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Investment Advisory Agreement
Ladies and Gentlemen:
The undersigned, Pax World Growth Fund, Inc. (the "Fund"), is an
investment company registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Fund is an open-end diversified
management investment company, as defined in the Investment Company Act, and
invests and reinvests its assets in a portfolio of investments. The Fund hereby
engages you, Pax World Management Corp. (the "Adviser"), to act as its
investment adviser and financial agent, subject to the terms and conditions
herein set forth.
SECTION 1. MANAGEMENT SERVICES
The Fund will, from time to time, furnish to you detailed statements
of the investments and resources of the Fund and information as to its
investment needs, and will make available to you such financial reports, proxy
statements, legal and other information relating to its investment as may be in
the possession of the Fund or available to it.
You shall, at your expense, use your experience, staff and other
facilities to conduct and maintain a continuous review of the Fund's
investments, resources and needs, and shall from time to time furnish to the
Directors of the Fund (the "Directors") or such others as the Directors shall
direct, your advice and recommendations with respect to the purchase and sale of
investments by the Fund and the making of commitments thereto. In conducting
such review and furnishing such advice and recommendations, you shall be guided
by the Fund's investment policy and restrictions as delineated and limited by
the statements contained in the various documents and amendments thereto filed
with the Securities and Exchange Commission (the "SEC").
You shall place at the disposal of the Fund such statistical
research, analytical and technical services and information and reports as may
be reasonably required by the Fund, shall furnish the Fund with, and pay the
salaries of, the executive, administrative and clerical personnel of the Fund,
and in general shall supervise the affairs of the Fund, subject to the control
of the Directors. Your advice and recommendations with respect to the purchase
and sale of investments and the making of investment commitments shall be
submitted at the principal offices of the Fund to the Directors of the Fund, to
an investment committee thereof, or to such other person or persons as the
Directors or such investment committee shall designate for that purpose. The
Directors, such investment committee, or such designated person or persons shall
have full authority to act upon such advice and recommendations and to place
orders on behalf of the Fund for the purchase and sale of investments. Reports
of portfolio recommendations shall be made
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quarterly to the Directors or more frequently as the Directors may from time to
time determine.
SECTION 2. DUTIES AS FINANCIAL AGENT OF THE FUND
You shall keep the books and financial records of the Fund, and on
behalf of the Fund, shall compare the value of the principal and income of the
Fund and of its shares (in accordance with the instructions of the Directors) at
such times as the Directors may direct, and shall perform such other services as
are reasonably related to the foregoing duties. You shall furnish to the Fund
and the Directors statements with respect to the valuation of the Fund and its
shares, at such times, and in such forms, as the Directors may prescribe.
SECTION 3. BROKERAGE SERVICES
When and if the Directors so request, you shall furnish brokerage
services in connection with the Fund's investments, and may make such charges
for those services as are permitted by law or by the applicable rules of the
National Association of Securities Dealers, Inc., or any stock exchange, but
only if and to the extent that any such charges are permitted by the Articles of
Incorporation and/or By-Laws of the Fund as then in effect.
At any time when you shall have been requested to act in your
capacity as broker in connection with any of the Fund's investments, you shall
deposit with or obtain from the Fund's custodian any and all of such securities
and investments only in accordance with the requirements and provisions of the
custodial agreement entered into between the Fund and the Fund's custodian. It
is the intent hereof that the Fund's custodian shall obtain and maintain the
exclusive possession of, and be responsible for the security and safekeeping of,
the Fund's investments, and that you shall have possession of such investments
only as shall be required to implement transactions normally requiring the
services of a broker, and which have been directed by the Directors or such
other person or persons as the Directors shall designate for that purpose.
SECTION 4. ADDITIONAL SERVICES, EXPENSES, ETC.
You shall furnish to the Fund, and pay for, such office space and
facilities, including, without being limited to, stenographic, telephone,
telegraph, mailing, and other facilities as the Directors shall request in
connection with the operations of the Fund. It is the intent of this contract
that, through your staff, you shall supply and pay for such services as are
deemed by the Directors to be necessary or desirable and proper for the
continuous operation of the Fund (excluding all taxes and charges of
governmental agencies and brokerage commissions incurred in connection with
portfolio transactions) which are in excess of one and one-half percent (1-1/2%)
of the average net asset value of the Fund per annum. Such expenses include (i)
the reimbursement of organizational expenses, (ii) fees paid to unaffiliated
directors of the Fund; (iii) the commissions and/or fees of the Fund's
custodian, distributor, registrar, transfer and dividend disbursing agent,
independent accountants and legal counsel; (iv) taxes, brokerage commissions and
all other expenses incurred in connection with portfolio transactions; and (v)
expenses related to shareholder communications including all expenses of
shareholders' and Board of Directors' meetings and of preparing, printing and
mailing Fund share certificates, reports, notices, proxy statements and
prospectuses to Fund shareholders and Directors.
SECTION 5. INDEPENDENT CONTRACTOR
You shall, for all purposes, be deemed to be an independent
contractor and shall have no authority to act for or represent the Fund unless
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otherwise provided. No agreement, bid, offer, commitment, contract or other
engagement entered into by you, whether on your behalf or purported to have been
on behalf of the Fund, shall be binding upon the Fund, and all acts authorized
to be done by you under this contract shall be done by you as an independent
contractor and not as agent.
SECTION 6. MULTIPLE CAPACITIES, TRANSACTIONS
Nothing contained in this contract shall be deemed to prohibit you
from acting, and being separately compensated for so acting, in one or more
capacities on behalf of the Fund, including but not limited to, the capacities
of investment adviser, broker, and distributor. Whenever you shall be required
to act in multiple capacities, either under this contract or by virtue of this
or any other contract between you and the Fund, you shall maintain appropriate
separate accounts and records for each such capacity.
Except to the extent necessary for the performance of your
obligations hereunder, nothing in this contract shall restrict your right or the
right of any of your directors, officers or employees (whether or not they are
directors, officers or employees of the Fund) to engage in any other business or
to devote time and attention to the management or other aspects of any other
business whether of a similar or dissimilar nature or to render services of any
kind to any other corporation, firm, individual or association or to participate
or to be otherwise interested, as principal, agent or otherwise, in sales,
purchases or other transactions with the Fund or its directors, officers,
agents, attorney, servants, independent contractors, brokers, custodian,
underwriters, distributors and other persons, except as may be prohibited by the
Investment Company Act.
It is understood and agreed that officers, directors, shareholders,
employees and agents of the Fund may be interested in the Adviser as officers,
directors, shareholders, employees and agents and vice versa. Specifically, it
is understood and agreed that the officers, directors, shareholders, employees
and agents of the Adviser may be simultaneously officers and/or directors of the
Fund, but that they are to receive no remuneration solely for acting in those
capacities.
SECTION 7. COMPENSATION FOR SERVICES
Except as provided below, you shall receive such compensation for
your services as is provided in this Section, and such payments shall be the
only compensation to which you shall be entitled under this contract. The
compensation referred to herein shall not be deemed to include, and shall be in
addition to (i) any charges you may make to the Fund in your capacity as broker
for purchases or sales of securities and investments pursuant to Section 3
hereof, and (ii) any payments which you may receive in connection with your
services as distributor of the Fund's shares, if such is provided.
Subject to the foregoing exceptions and limitations, the Fund will
pay to you a fee per annum computed at the following rates: in the event that
the average net assets of the Fund are less than $5,000,000.00, you will be
compensated by the Fund for your services hereunder at an annual rate of
$25,000.00; in the event that the average net assets of the Fund are equal to or
in excess of $5,000,000.00, you will be compensated by the Fund for your
services hereunder at an annual rate of one percent (1%) of average net assets
up to and including $25,000,000.00 and three-quarters of one percent (.75%) of
average net assets in excess of $25,000,000.00. The fee shall be paid to you in
monthly installments on the last business day of each month and the amount of
each such payment shall be computed and accrued on the basis of the net asset
value of the Fund at the end of each business day during each calendar month.
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SECTION 8. LIABILITY
You shall give the Fund the benefit of your best judgment and
efforts in rendering the services set forth herein, and the Fund agrees as an
inducement to the undertaking of these services by you that you shall not be
liable for any loss suffered by the Fund resulting from any error of judgment or
any mistake of law or fact in connection with any matters as to which this
contact relates, except that nothing herein contained shall be construed to
protect you against any liability by reason of willful misfeasance, bad faith or
gross negligence in the performance of your duties or by reckless disregard of
your obligations or duties under this contract.
SECTION 9. APPROVAL OF CONTRACT TERMINATION
As promptly as practicable after its execution, this contract will
be submitted to the Fund's shareholders for approval at a meeting thereof duly
convened for such purpose. If approved at such meeting by the vote of the
holders of a majority of the Fund's outstanding voting shares, the contract
shall be effective _______________, 1997 for an initial term expiring June 30,
1997. Thereafter, the contract will continue in effect for successive yearly
terms ending June 30, following the conclusion of each annual meeting of
shareholders, unless earlier terminated by either party as set forth below,
provided that the renewal of this contract and its terms are specifically
approved annually by the vote of the holders of a majority of the Fund's
outstanding shares or annually by the majority vote of the disinterested
Directors. Notwithstanding the foregoing, this contract is terminable by either
party on sixty (60) days written notice, with or without cause and without
payment of any penalty, and will terminate automatically in the event of any
assignment, unless an order is issued by the SEC conditionally or
unconditionally exempting such assignment from the provision of Section 15(a) of
the Investment Company Act, in which event this contract shall continue in full
force and effect.
This contract may not be amended, transferred or assigned, or in any
manner hypothecated or pledged, nor may any new contract become effective,
without the affirmative vote or written consent of the holders of a majority of
the outstanding voting shares of the Fund; provided, however, that this
limitation shall not prevent any non-material amendments to the contract or such
amendments as may be required by federal or state regulatory bodies.
SECTION 10. CONCERNING APPLICABLE PROVISIONS OF LAW, ETC.
This contract shall be subject to all applicable provisions of law,
including without being limited to, the applicable provisions of the Investment
Company Act and the Investment Advisers Act of 1940, as amended, and to the
extent that any provisions herein contained conflict with any such applicable
provisions of law, the latter shall control.
This contract is executed and delivered in the State of New
Hampshire and the laws of the State of New Hampshire shall, except to the extent
that any applicable provisions of some other laws shall be controlling, govern
the construction, validity and effect of this contract.
The headings preceding the text of the several Sections herein are
inserted solely for convenience of reference and shall not affect the meaning,
construction or effect of this contract.
If the foregoing correctly sets forth our understanding, please sign
the enclosed copy of this letter where indicated and return it to the
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undersigned, whereupon this letter shall constitute a binding contract between
the parties hereto.
Very truly yours,
PAX WORLD GROWTH FUND, INC.
By:______________________________
[Name]
[Title]
Accepted and agreed to as of
the date first above written:
PAX WORLD MANAGEMENT CORP.
By:______________________________
[Name]
President
By:______________________________
[Name]
Secretary
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