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Exhibit 5(b)
PAX WORLD MANAGEMENT CORP.
000 XXXXX XXXXXX
XXXXXXXXXX, XX 00000
_______________, 1997
X. X. Xxxxxxxxxx & Co., Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Investment Sub-Advisory Agreement
Ladies and Gentlemen:
The undersigned, Pax World Management Corp. (the "Adviser"), is an
investment adviser registered under the Investment Advisers Act of 1940, as
amended (the "Investment Advisers Act"). Pax World Growth Fund, Inc. (the
"Fund") is an open-end diversified management investment company, registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"), which invests and reinvests its assets in a portfolio of investments. The
Fund has engaged the Adviser to act as its investment adviser and financial
agent, subject to the terms and conditions set forth in the Investment Advisory
Agreement dated the date hereof between the Fund and the Adviser; the Adviser
hereby engages X. X. Xxxxxxxxxx Capital Management, a division of X. X.
Xxxxxxxxxx & Co., Inc. (the "Sub-Adviser") to act as its investment sub-adviser
and financial agent, subject to the terms and conditions set forth herein.
SECTION 1. MANAGEMENT SERVICES
The Adviser 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 the investment of the
Fund as may be in the possession of the Adviser 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
Adviser or such others as the Adviser 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 Adviser such statistical
research, analytical and technical services and information and reports as may
be reasonably required by the Adviser, shall furnish the Adviser 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 Adviser. Your advice and recommendations with respect to the
purchase and sale of investments and the making of investment commitments shall
be submitted to the Adviser at its principal offices or to such other person or
persons as the Adviser shall designate for that purpose. The Adviser or such
designated person or persons shall have full authority to act upon such advice
and recommendations and to recommend that the Fund place orders on behalf of the
Fund for the purchase and sale of investments.
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Reports of portfolio recommendations shall be made quarterly to the Adviser or
more frequently as the Adviser may from time to time determine.
SECTION 2. DUTIES AS FINANCIAL AGENT OF THE FUND
If so requested by the Adviser, you shall keep the books and
financial records of the Fund, and on behalf of the Adviser, shall compare the
value of the principal and income of the Fund and of its shares (in accordance
with the instructions of the Adviser) at such times as the Adviser may direct,
and shall perform such other services as are reasonably related to the foregoing
duties. You shall furnish to the Adviser statements with respect to the
valuation of the Fund and its shares, at such times, and in such forms, as the
Adviser may prescribe.
SECTION 3. BROKERAGE SERVICES
When and if the Adviser and/or the Fund 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 Board of Directors of
the Fund (the "Directors") or such other person or persons as the Directors
shall designate for that purpose.
SECTION 4. 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 Adviser
unless 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 Adviser, shall be binding upon the Adviser, 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 5. 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
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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 Sub-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 Sub-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 6. 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 Adviser
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 Adviser for your services at an annual rate of $25,000.00; in
the event that average net assets of the Fund are equal to or in excess of
$5,000,000.00, you will be compensated by the Adviser for your services at an
annual rate of one-third of one percent (.33%) of average net assets up to and
including $25,000,000.00 and one-quarter of one percent (.25%) of average net
assets in excess of $25,000,000.00, but in no event to exceed the annual sum of
Two Hundred and Fifty Thousand Dollars ($250,000.00) net of expenses. 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.
SECTION 7. LIABILITY
You shall give the Adviser the benefit of your best judgment and
efforts in rendering the services set forth herein, and the Adviser agrees as an
inducement to the undertaking of these services by you that you shall not be
liable for any loss suffered by the Adviser 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 8. 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
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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 9. 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, 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 York and
the laws of the State of New York 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
undersigned, whereupon this letter shall constitute a binding contract between
the parties hereto.
Very truly yours,
PAX WORLD MANAGEMENT CORP.
By:______________________________
[Name]
[Title]
Accepted and agreed to as of
the date first above written:
X. X. XXXXXXXXXX & CO., INC.
By:______________________________
[Name]
President
By:______________________________
[Name]
Secretary
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