EXHIBIT NO. 99.4(a)
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made this 18th day of January, 1985 by and between
Massachusetts Financial Development Fund, a Massachusetts business trust (the
"Fund") and Massachusetts Financial Services Company, a Delaware Corporation
(the "Adviser").
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940;
WHEREAS, the Adviser is willing to provide business management services
to the Fund 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:
ARTICLE 1: DUTIES OF THE ADVISER. The Adviser shall provide the Fund
with such investment advice and supervision as the latter may from time to time
consider necessary for the proper management of its funds. The Adviser shall act
as Adviser to the Fund 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 Fund shall be
held uninvested, subject always to the restrictions of its Declaration of Trust,
dated November 7, 1984, and By-Laws, as amended from time to time (respectively,
the "Declaration" and the "By-Laws"), and to the provisions of the Investment
Company Act of 1940. 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 Fund's portfolio securities shall be exercised.
Should the Trustees at any time, however, make any definite determination as to
investment policy 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or until similarly notified that such determination has been revoked.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 Fund, 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 portfolio securities
for the Fund's account with brokers or dealers selected by it, and to that end
the Adviser is authorized as the agent of the Fund to give instructions to the
Custodian of the Fund as to deliveries of securities and payments of cash for
the account of the Fund. In connection with the selection of such brokers or
dealers and the placing of such orders, the Adviser is directed to seek for the
Fund execution at the most favorable price by responsible brokerage firms at
reasonably competitive commission rates. In fulfilling this requirement the
Adviser shall not be deemed to have acted unlawfully or to have breached any
duty, created by this Agreement or otherwise, solely by reason of its having
caused the Fund to pay a broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if the Adviser
determined in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Adviser's overall responsibilities with respect to the Fund and to other clients
of the Adviser as to which the Adviser exercised investment discretion.
ARTICLE 2: ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall
furnish at its own expense investment advisory and administrative services,
office space, equipment and clerical personnel necessary for servicing the
investments of the Fund and maintaining its organization, and investment
advisory facilities and executive and supervisory personnel for managing the
investments and effecting the portfolio transactions of the Fund. The Adviser
shall arrange, if desired by the Fund, for Directors, officers and employees of
the Adviser to serve as Trustees, officers or agents of the Fund if duly elected
or appointed to such positions and subject to their individual consent and to
any limitations imposed by law. It is understood that the Fund will pay all of
its own expenses 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 Fund, fees
and expenses of independent auditors, of legal counsel and of any transfer
agent, registrar or dividend disbursing agent of the Fund, expenses of
repurchasing and redeeming shares, expenses of preparing, printing and mailing
stock certificates, prospectuses, shareholder reports, notices, proxy statements
and reports to governmental officers and commissions, brokerage and other
expenses connected with the execution of portfolio security transactions,
insurance premiums, fees and expenses of the custodian for all services to the
Fund, including safekeeping of funds and securities, keeping of books and
accounts and calculation of the net asset value of shares of the Fund, expenses
of shareholder meetings, and expenses relating to the issuance, registration and
qualification of shares of the Fund.
ARTICLE 3: COMPENSATION OF THE ADVISER. For the services to be rendered
and the facilities to be furnished as provided in Articles 1 and 2 above, the
Fund shall pay to the Adviser an investment advisory fee computed and paid
monthly at the annual rate .25% of the Fund's average daily net assets and 3.57%
of the Fund's gross income for the period, provided that:
(a) The annual rate applicable to average daily net assets in excess of
$200,000,000 shall be .212% of said excess;
(b) The annual rate applicable to gross income in excess of $14,000,000
shall be 3.04% of said excess; and
(c) Within thirty days following the close of any fiscal year of the
Fund, the Adviser will pay to the Fund a sum equal to the amount by
which the aggregate expenses of the Fund incurred during such
fiscal year, but excluding interest, taxes and brokerage
commissions, exceed the sum of (a) 1 1/2% of the average daily net
assets of the preceding year up to and including $40,000,000 and
(b) 1% of any excess of average daily net assets of the preceding
year over $40,000,000. The obligation of the Adviser to reimburse
the Fund for expenses incurred for any year may be terminated or
revised at any time by the Adviser without the consent of the Fund
by notice in writing from the Adviser to the Fund, provided,
however, that termination or revision of the Adviser's obligation
to reimburse for expenses is not to be effective with respect to
the fiscal year within which such notice is given.
If the Adviser shall serve for less than the whole of any period specified in
this Article 3, the compensation to the Adviser shall be prorated.
ARTICLE 4: COVENANTS OF THE ADVISER. The Adviser agrees that it will
not deal with itself, or with the Trustees of the Fund or the Underwriter as
principals in making purchases or sales of securities or other property for the
account of the Fund, will not take a long or short position in the shares of the
Fund except as provided by the Declaration, and will comply with all other
provisions of the Declaration and By-Laws relative to the Adviser and its
directors and officers.
ARTICLE 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 and
management of the Fund, 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 Article 5, the term
"Adviser" shall include directors, officers and employees of the Adviser as well
as the corporation itself.
ARTICLE 6: ACTIVITIES OF THE ADVISER. The services of the Adviser to
the Fund are not to be deemed to be exclusive, the Adviser being free to render
services to others. The Adviser may permit other Fund clients to use the words
"Massachusetts Financial" in their names. The Fund agrees that if the Adviser
shall for any reason no longer serve as the Adviser to the Fund, the Fund will
change its name so as to delete the words "Massachusetts Financial". It is
understood that Trustees, officers, and shareholders of the Fund are or may be
or 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 Fund and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
ARTICLE 7: DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT. This
Agreement shall become effective on the date of its execution and shall govern
the relations between the parties hereto thereafter, and shall remain in force
until August 1, 1985 on which date it will terminate unless its continuance
after August 1, 1985 is specifically approved at least annually (i) by the vote
of a majority of the Trustees of the Fund who are not interested persons of the
Fund or of the Adviser at a meeting specifically called for the purpose of
voting on such approval, and (ii) by the Trustees of the Fund, or by vote of a
majority of the outstanding voting securities of the Fund. The aforesaid
requirement that continuance of this Agreement be "specifically approved at
least annually" shall be construed in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by vote of a majority of the outstanding voting
securities of the Fund, or by the Adviser, on not more than sixty days' nor less
that thirty 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
vote of a majority of the outstanding voting securities of the Fund.
The terms "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 the Investment
Company Act of 1940 and the Rules and Regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned
officers thereunto duly authorized, and their respective seals to be hereto
affixed, all as of the day and year first above written.
MASSACHUSETTS FINANCIAL
DEVELOPMENT FUND
By: XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: H. XXXXX XXXXXXX, XX.
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H. Xxxxx Xxxxxxx, Xx.
President
