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EXHIBIT 4(i)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of March 24, 1999, by and between MERCURY ASSET
MANAGEMENT MASTER TRUST, a Delaware business trust (hereinafter referred to as
the "Trust") on behalf of its series MERCURY MASTER GLOBAL BALANCED PORTFOLIO
(the "Portfolio") and MERCURY ASSET MANAGEMENT INTERNATIONAL LTD., a
corporation organized under the laws of England and Wales (hereinafter referred
to as the "Investment Adviser").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Trustees of the Trust (the "Trustees") are authorized to
establish separate series relating to separate portfolios of securities, each
of which may offer separate classes of shares; and
WHEREAS, the Trustees have established and designated the Portfolio as
a series of the Trust; and
WHEREAS, the Investment Adviser is engaged principally in rendering
management and investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940 and regulated by the
Investment Management Regulatory Organization, a self-regulating organization
recognized under the Financial Services Act of 1986 of the United Kingdom
(hereinafter referred to as "IMRO"), and the conduct of its investment business
is regulated by IMRO; and
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WHEREAS, the Trust desires to retain the Investment Adviser to provide
management and investment advisory services to the Portfolio in the manner and
on the terms hereinafter set forth; and
WHEREAS, the Investment Adviser is willing to provide management and
investment advisory services to the Portfolio on the terms and conditions
hereafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Investment Adviser hereby agree as
follows:
ARTICLE I
DUTIES OF THE INVESTMENT ADVISER
The Trust hereby employs the Investment Adviser to act as a manager
and investment adviser of the Portfolio and to furnish, or arrange for
affiliates to furnish, the management and investment advisory services
described below, subject to the policies of, review by and overall control of
the Trustees, for the period and on the terms and conditions set forth in this
Agreement. The Investment Adviser hereby accepts such employment and agrees
during such period, at its own expense, to render, or arrange for the rendering
of, such services and to assume the obligations herein set forth for the
compensation provided for herein. The Investment Adviser and its affiliates
shall for all purposes herein be deemed to be independent contractors and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Trust or the Portfolio in any way or otherwise be
deemed agents of the Trust or the Portfolio.
(a) Management Services. The Investment Adviser shall perform (or
arrange for the performance by affiliates of) the management and administrative
services necessary for the operation of the Trust and the Portfolio. The
Investment Adviser shall provide the Trust and the Portfolio with
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office space, facilities, equipment and necessary personnel and such other
services as the Investment Adviser, subject to review by the Trustees, shall
from time to time determine to be necessary or useful to perform its
obligations under this Agreement. The Investment Adviser shall also, on behalf
of the Trust and the Portfolio, conduct relations with custodians,
depositories, transfer agents, dividend disbursing agents, other shareholder
servicing agents, accountants, attorneys, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and such other persons in any such other
capacity deemed to be necessary or desirable. The Investment Adviser shall
generally monitor the Trust's and the Portfolio's compliance with investment
policies and restrictions as set forth in the Registration Statement of the
Trust filed with the Securities and Exchange Commission under the Investment
Company Act, as amended from time to time (the "Registration Statement"). The
Investment Adviser shall make reports to the Trustees of its performance of
obligations hereunder and furnish advice and recommendations with respect to
such other aspects of the business and affairs of the Portfolio as it shall
determine to be desirable.
(b) Investment Advisory Services. The Investment Adviser shall
provide (or arrange for affiliates to provide) the Trust with such investment
research, advice and supervision as the latter may from time to time consider
necessary for the proper supervision of the assets of the Portfolio, shall
furnish continuously an investment program for the Portfolio and shall
determine from time to time which securities shall be purchased, sold or
exchanged and what portion of the assets of the Portfolio shall be held in the
various securities and other financial instruments in which the Portfolio
invests or cash, subject always to the restrictions of the Declaration of Trust
and By-Laws of the Trust, as amended from time to time, the provisions of the
Investment Company Act and the statements relating to the Portfolio's
investment objectives, investment policies and investment
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restrictions as the same are set forth in the Trust's current Registration
Statement. The Investment Adviser shall make decisions for the Trust as to the
manner in which voting rights, rights to consent to corporate action and any
other rights pertaining to the Portfolio's portfolio securities shall be
exercised. Should the Trustees at any time, however, make any definite
determination as to investment policy and notify the Investment Adviser thereof
in writing, the Investment 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 Investment Adviser shall take, on behalf
of the Portfolio, 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 Portfolio's
account with brokers or dealers selected by it, and to that end, the Investment
Adviser is authorized as the agent of the Trust to give instructions to the
custodian of the Portfolio as to deliveries of securities and payments of cash
for the account of the Portfolio. In connection with the selection of such
brokers or dealers and the placing of such orders with respect to assets of the
Portfolio, the Investment Adviser is directed at all times to seek to obtain
execution and price within the policy guidelines determined by the Trustees and
set forth in the then current Registration Statement. Subject to this
requirement and the provisions of the Investment Company Act, the Securities
Exchange Act of 1934, as amended, and other applicable provisions of law, the
Investment Adviser may select brokers or dealers with which it or the Trust is
affiliated.
(c) Affiliated Sub-Advisers. In carrying out its responsibilities
hereunder, the Investment Adviser may employ, retain or otherwise avail itself
of the services of other persons or entities including without limitation,
affiliates of the Investment Adviser, on such terms as the Investment Adviser
shall determine to be necessary, desirable or appropriate. However, if the
Investment
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Adviser chooses to retain or avail itself of the services of another person or
entity to manage assets of the Fund, such other person or entity must be (i) an
affiliate of the Investment Adviser, (ii) retained at the Investment Adviser's
own cost and expense, and (iii) retained subject to the requirements of Section
15 of the Investment Company Act. Retention of one or more affiliated
sub-advisers, or the employment or retention of other persons or entities to
perform services, shall in no way reduce the responsibilities or obligations of
the Investment Adviser under this Agreement and the Investment Adviser shall be
responsible for all acts and omissions of such affiliated sub-advisers, or
other persons or entities, in connection with the performance of the Investment
Adviser's duties hereunder.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
(a) The Investment Adviser. The Investment Adviser assumes and
shall pay, or cause its affiliate to pay, for maintaining the staff and
personnel necessary to perform its obligations under this Agreement, and shall,
at its own expense, provide the office space, facilities and necessary
personnel which it is obligated to provide under Article I hereof. The
Investment Adviser shall pay, or cause its affiliate to pay, compensation of
all Officers of the Trust and all Trustees of the Trust who are affiliated
persons of the Investment Adviser or any sub-adviser, or of an affiliate of the
Investment Adviser or any sub-adviser.
(b) The Trust. The Trust assumes and shall pay or cause to be
paid all other expenses of the Trust and the Portfolio (except for the expenses
paid by the Mercury Funds Distributor division of Princeton Funds Distributor,
Inc. (the "Distributor")), including, without limitation: taxes, expenses for
legal and auditing services, costs of printing proxies, shareholder reports,
copies of the
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Registration Statement, charges of the custodian, any sub-custodian and
transfer agent, expenses of portfolio transactions, expenses of redemption of
shares, Securities and Exchange Commission fees, expenses of registering the
shares under Federal, state and foreign laws, fees and actual out-of-pocket
expenses of Trustees who are not affiliated persons of the Investment Adviser
or any sub-adviser, or of an affiliate of the Investment Adviser or any
sub-adviser, accounting and pricing costs (including the daily calculation of
the net asset value), insurance, interest, brokerage costs, litigation and
other extraordinary or non-recurring expenses, and other expenses properly
payable by the Trust or the Portfolio. It is also understood that the Trust
shall reimburse the Investment Adviser or an affiliate of the Investment
Adviser for its costs in providing accounting services to the Trust and the
Portfolio. The Distributor will pay certain of the expenses of the Portfolio
incurred in connection with the continuous offering of shares of beneficial
interest of the Portfolio.
ARTICLE III
COMPENSATION OF THE INVESTMENT ADVISER
Management and Investment Advisory Fee. For the services rendered,
the facilities furnished and expenses assumed by the Investment Adviser, the
Portfolio shall pay to the Investment Adviser at the end of each calendar month
a fee based upon the average daily value of the net assets of the Portfolio, as
determined and computed in accordance with the description of the determination
of net asset value contained in the Registration Statement, at the annual rate
of 0.60% of the average daily net assets of the Portfolio, commencing on the
day following effectiveness hereof. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last day
of a month, compensation for that part of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fee as set
forth above. Payment of the Investment
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Adviser's compensation for the preceding month shall be made as promptly as
possible after completion of the computations contemplated above. During any
period when the determination of net asset value is suspended by the Trustees,
the net asset value of a share as of the last business day prior to such
suspension shall for this purpose be deemed to be the net asset value at the
close of each succeeding business day until it is again determined.
ARTICLE IV
LIMITATION OF LIABILITY OF THE INVESTMENT ADVISER
The Investment 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 management of the Trust and the Portfolio, 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 IV, the term "Investment Adviser" shall
include any affiliates of the Investment Adviser performing services for the
Trust or the Portfolio contemplated hereby and partners, directors, officers
and employees of the Investment Adviser and such affiliates.
ARTICLE V
ACTIVITIES OF THE INVESTMENT ADVISER
The services of the Investment Adviser to the Trust and the Portfolio
are not to be deemed to be exclusive, and the Investment Adviser and each
affiliate is free to render services to others. It is understood that
Trustees, officers, employees and shareholders of the Trust and the Portfolio
are or may become interested in the Investment Adviser and its affiliates, as
directors, officers, employees, partners and shareholders or otherwise, and
that the Investment Adviser and directors, officers, employees, partners and
shareholders of the Investment Adviser and its affiliates are or may become
similarly interested in the Trust or the Portfolio as shareholders or
otherwise.
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ARTICLE VI
INVESTMENT ADVISER STATEMENTS PURSUANT TO IMRO RULES
Any complaints concerning the Investment Adviser should be in writing
addressed to the attention of the Managing Director of the Investment Adviser.
The Trust has the right to obtain from the Investment Adviser a copy of the
IMRO complaints procedure and to approach IMRO and the Investment Ombudsman
directly.
The Investment Adviser may make recommendations, subject to the
investment restrictions referred to in Article I herein, regarding Investments
Not Readily Realisable (as that term is used in the IMRO Rules) or investments
denominated in a currency other than British pound sterling. There can be no
certainty that market makers will be prepared to deal in unlisted or thinly
traded securities and an accurate valuation may be hard to obtain. The value
of investments recommended by the Investment Adviser may be subject to exchange
rate fluctuations which may have favorable or unfavorable effects on
investments.
The Investment Adviser may make recommendations, subject to the
investment restrictions referred to in Article I herein, regarding options,
futures or contracts for differences. Markets can be highly volatile and such
investments carry a high degree of risk of loss exceeding the original
investment and any margin on deposit.
ARTICLE VII
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above
written, and shall remain in force for two years thereafter and thereafter, but
only so long as such continuance is specifically approved at least annually by
(i) the Trustees, or by the vote of a majority of the outstanding voting
securities of the Portfolio, and (ii) a majority of those Trustees who are not
parties to this Agreement
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or interested persons of any such party cast in person at a meeting called for
the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees or by the vote of a majority of the outstanding
voting securities of the Portfolio, or by the Investment Adviser, on sixty
days' written notice to the other party. This Agreement shall automatically
terminate in the event of its assignment.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) by the vote of a majority of outstanding voting
securities of the Portfolio, and (ii) a majority of those 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.
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
The terms "vote of majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with laws of the State
of New York and the applicable provisions of the Investment Company Act. To
the extent that the applicable laws of
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the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the Investment Company Act, the latter shall control.
ARTICLE XI
LIMITATION OF OBLIGATIONS OF THE PORTFOLIO
The obligations of the Portfolio shall be limited to the assets of the
Portfolio, shall be separate from the obligations of any other series of the
Trust, and the Portfolio shall not be liable for the obligations of any other
series of the Trust.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written. This Agreement may be
executed by the parties hereto on any number of counterparts, all of which
together shall constitute one and the same instrument.
MERCURY ASSET MANAGEMENT
MASTER TRUST on behalf of
its series, MERCURY MASTER
GLOBAL BALANCED PORTFOLIO
By:
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Title:
MERCURY ASSET MANAGEMENT
INTERNATIONAL LTD.
By:
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Title:
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