EXHIBIT NO. 99.4
FORM OF
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 26th day of July, 2005, by
and between MFS SERIES TRUST XII, a Massachusetts business trust (the "Trust"),
on behalf of its series of shares (each a "Fund") listed on Appendix A attached
hereto, and MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware corporation
(the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an investment company
registered under the Investment Company Act of 1940; and
WHEREAS, the Adviser is willing to provide services to each 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. (a) The Adviser shall provide each
Fund with such investment advice and supervision as the latter may from time to
time consider necessary for the proper supervision of its assets. The Adviser
shall act as investment adviser to each Fund and as such shall furnish
continuously an investment program and shall determine from time to time what
securities or other instruments shall be purchased, sold or exchanged and what
portion of the assets of each Fund shall be held uninvested, subject always to
the restrictions of the Trust's Declaration of Trust, dated June 29, 2005, and
By-Laws, each as amended from time to time (respectively, the "Declaration" and
the "By-Laws"), to the provisions of the Investment Company Act of 1940 and the
Rules, Regulations and orders thereunder and to a Fund's then-current Prospectus
and Statement of Additional Information. The Adviser also shall exercise voting
rights, rights to consent to corporate actions and any other rights pertaining
to a Fund's portfolio securities in accordance with the Adviser's policies and
procedures as presented to the Trustees of the Trust from time to time. Should
the Trustees at any time, however, make any definite determination as to the
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 shall be revoked.
(b) The Adviser shall take, on behalf of each 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 or other instruments for each Fund's account with brokers
or dealers selected by it, and to that end, the Adviser is authorized as the
agent of each Fund to give instructions to the Custodian of each Fund as to the
deliveries of securities or other instruments and payments of cash for the
account of each Fund. In connection with the selection of such brokers or
dealers and the placing of such orders, the Adviser is directed to seek for each
Fund the best overall price and execution available from responsible brokerage
firms, taking account of all factors it deems relevant, including by way of
illustration: price; the size of the transaction; the nature of the market for
the security; the amount of the commission; the timing and impact of the
transaction taking into account market prices and trends; the reputation,
experience and financial stability of the broker or dealer involved; and the
quality of services rendered by the broker or dealer in other transactions. 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 a 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 exercises
investment discretion. Subject to seeking the best price and execution as
described above, and in accordance with applicable rules and regulations, the
Adviser also is authorized to consider sales of shares of each Fund or of other
funds or accounts of the Adviser as a factor in the selection of brokers and
dealers.
(c) The Adviser may from time to time enter into sub-investment
advisory agreements with respect to a Fund with one or more investment advisers
with such terms and conditions as the Adviser may determine, provided that such
sub-investment advisory agreements have been approved in accordance with
applicable provisions of the Investment Company Act of 1940 and any rules,
regulations or orders of the Securities and Exchange Commission thereunder.
Subject to the provisions of Article 6, the Adviser shall not be liable for any
error of judgment or mistake of law by any sub-adviser or for any loss arising
out of any investment made by any sub-adviser or for any act or omission in the
execution and management of a Fund by any sub-adviser.
ARTICLE 2. ALLOCATION OF CHARGES AND EXPENSES. (a) 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 each Fund and maintaining its organization, and investment
advisory facilities and executive and supervisory personnel for managing the
investments and effecting the portfolio transactions of each Fund. The Adviser
shall arrange, if desired by the Trust, for directors, officers and employees of
the Adviser to serve as Trustees, officers or agents of the Trust if duly
elected or appointed to such positions and subject to their individual consent
and to any limitations imposed by law.
(b) It is understood that the Trust and each Fund will pay all of
their own expenses incurred in their operations and the offering of a Fund's
shares, unless specifically provided otherwise in this Agreement or except to
the extent that the Adviser agrees in a written instrument executed by the
Adviser (specifically referring to this Article 2(b)) to assume or otherwise
pay for specified expenses of the Trust or a Fund, 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 a Fund; fees and expenses of independent
auditors, of legal counsel, and of any transfer agent, registrar or dividend
disbursing agent of a Fund; expenses of repurchasing and redeeming shares and
servicing shareholder accounts; expenses of preparing, printing and mailing
stock certificates, shareholder reports, notices, proxy statements and reports
to governmental officers and commissions; brokerage and other expenses
connected with the execution, recording and settlement of portfolio security
transactions; insurance premiums; fees and expenses of the custodian for all
services to a Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of shares of a Fund; organizational and start up costs; such
non-recurring or extraordinary expenses as may arise, including those relating
to actions, suits or proceedings to which a Fund is a party or otherwise may
have an exposure, and the legal obligation which a Fund may have to indemnify
the Trust's Trustees and officers with respect thereto; and expenses relating
to the issuance, registration and qualification of shares of a Fund and the
preparation, printing and mailing of prospectuses for such purposes (except to
the extent that any Distribution Agreement to which the Trust is a party
provides that another party is to pay some or all of such expenses).
(c) The payment or assumption by the Adviser of any expenses of the
Trust or a Fund that the Adviser is not obligated by this Agreement or otherwise
to pay or assume shall not obligate the Adviser to pay or assume the same or any
similar expenses of the Trust or a Fund on any subsequent occasion.
Article 3. Compensation of the Adviser. For the services to be rendered
and the facilities provided, each Fund shall pay to the Adviser an investment
advisory fee computed and paid monthly as set forth in Appendix B attached
hereto. If the Adviser shall serve for less than the whole of any period
specified in this Article 3, the compensation paid to the Adviser will be
prorated.
ARTICLE 4. ADDITIONAL SERVICES. Should the Trust have occasion to
request the Adviser or its affiliates to perform administrative or other
additional services not herein contemplated or to request the Adviser or its
affiliates to arrange for the services of others, the Adviser or its affiliates
will act for the Trust on behalf of a Fund upon request to the best of its
ability, with compensation for the services to be agreed upon with respect to
each such occasion as it arises. No such agreement for additional services shall
expand, reduce or otherwise alter the obligations of the Adviser, or the
compensation that the Adviser is due, under this Agreement.
ARTICLE 5. COVENANTS OF THE ADVISER. The Adviser agrees that it will
not deal with itself, or with the Trustees of the Trust or the Trust's
distributor, if any, as principals in making purchases or sales of securities or
other property for the account of a Fund, except as permitted by the Investment
Company Act of 1940 and any rules, regulations or orders of the Securities and
Exchange Commission thereunder, will not take a long or short position in the
shares of a Fund except as permitted by the applicable law, and will comply with
all other provisions of the Declaration and the By-Laws and the then-current
Prospectus and Statement of Additional Information of a Fund relative to the
Adviser and its directors and officers.
ARTICLE 6. 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 a Fund, except for willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties and obligations hereunder. As
used in this Article 6, the term "Adviser" shall include directors, officers and
employees of the Adviser as well as that corporation itself.
ARTICLE 7. ACTIVITIES OF THE ADVISER. (a) The Trust acknowledges that
the services of the Adviser to a Fund are not exclusive, the Adviser being free
to render investment advisory and/or other services to others. The Trust further
acknowledges that it is possible that, based on their investment objectives and
policies, certain funds or accounts managed by the Adviser or its affiliates may
at times take investment positions or engage in investment techniques which are
contrary to positions taken or techniques engaged in on behalf of a Fund.
Notwithstanding the foregoing, the Adviser will at all times endeavor to treat
all of its clients in a fair and equitable manner.
(b) The Trust acknowledges that whenever a Fund and one or more other
funds or accounts advised by the Adviser have available monies for investment,
investments suitable and appropriate for each shall be allocated in a manner
believed by the Adviser to be fair and equitable to each entity. Similarly,
opportunities to sell securities or other investments shall be allocated in a
manner believed by the Adviser to be fair and equitable to each entity. The
Trust acknowledges that in some instances this may adversely affect the size of
the position that may be acquired or disposed of for a Fund.
(c) It is understood that the Trustees, officers and shareholders of
the Trust 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 Trust, and that the
Adviser may be or become interested in a Fund as a shareholder or otherwise.
ARTICLE 8. MFS NAME. The Trust acknowledges that the names
"Massachusetts Financial Services," "MFS" or any derivatives thereof or logos
associated with those names (collectively, the "MFS Marks") are the valuable
property of the Adviser and its affiliates. The Adviser grants the Trust and
each Fund a non-exclusive and non-transferable right and sub-license to use the
MFS Marks only so long as the Adviser serves as investment adviser to the Trust
and each Fund. The Trust agrees that if the Adviser for any reason no longer
serves as investment adviser to a Fund, and the Adviser so requests, that Fund
promptly shall cease to use the MFS Marks and promptly shall amend its
registration statement to delete any references to the MFS Marks. Likewise, the
Trust agrees that if the Adviser for any reason no longer serves as investment
adviser to any Fund of the Trust, and the Adviser so requests, the Trust
promptly shall cease to use the MFS Marks and promptly shall amend its
Declaration of Trust to delete any references to the MFS Marks. The Trust
acknowledges that the Adviser may permit other clients to use the MFS Marks in
their names or other material. For purposes of this Article, the Trust shall be
deemed to have taken the required action "promptly" if such action is taken
within 90 days of the Adviser no longer serving as the investment adviser to a
Fund of the Trust, or from the date of the Adviser's request, as the case may
be.
ARTICLE 9. DURATION, TERMINATION AND AMENDMENT OF THIS AGREEMENT. (a)
This Agreement shall become effective with respect to the Trust on the date
first written above, and shall become effective with respect to a Fund, if
approved by the shareholders of such Fund, on the Effective Date for such Fund,
as set forth in Appendix A attached hereto. Thereafter, this Agreement will
remain in effect with respect to a Fund for a period of two years from that
Fund's Effective Date as set forth in Appendix A, on which date it will
terminate for that Fund unless its continuance is "specifically approved at
least annually" (i) by the vote of a majority of the Trustees of the Trust who
are not "interested persons" of the Trust or of the Adviser at a meeting
specifically called for the purpose of voting on such approval, and (ii) by the
Board of Trustees of the Trust, or by "vote of a majority of the outstanding
voting securities" of the applicable Fund.
(b) This Agreement may be terminated as to the Trust or as to any Fund
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 applicable Fund, or by the
Adviser, in each case on not more than sixty days' nor less than thirty days'
written notice to the other party. This Agreement shall automatically terminate
in the event of its "assignment".
(c) This Agreement may be amended with respect to a Fund only if such
amendment is in writing signed by or on behalf of the Trust and the Adviser and
is approved by "vote of a majority of the outstanding voting securities" of the
applicable Fund (if such shareholder approval is required by the Investment
Company Act of 1940).
(d) Any approval, renewal or amendment of this Agreement with respect
to a Fund by "vote of a majority of the outstanding voting securities" of that
Fund, by the Trustees of the Trust, or by a majority of the Trustees of the
Trust who are not "interested persons" of the Trust or the Adviser, shall be
effective to approve, renew or amend the Agreement with respect to that Fund
notwithstanding (i) that the approval, renewal or amendment has not been so
approved as to any other Fund, or (ii) that the approval, renewal or amendment
has not been approved by the vote of a majority of the outstanding voting
securities of the Trust as a whole.
ARTICLE 10. SCOPE OF TRUST'S OBLIGATIONS. A copy of the Trust's
Declaration of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts. The Adviser acknowledges that the obligations of or arising
out of this Agreement are not binding upon any of the Trust's Trustees,
officers, employees, agents or shareholders individually, but are binding solely
upon the assets and property of the Trust. If this Agreement is executed by the
Trust on behalf of one or more Funds, the Adviser further acknowledges that the
assets and liabilities of each Fund are separate and distinct and that the
obligations of or arising out of this Agreement concerning a Fund are binding
solely upon the assets or property of such Fund and not upon the assets or
property of any other Fund.
ARTICLE 11. DEFINITIONS AND INTERPRETATIONS. The terms "specifically
approved at least annually," "vote of a majority of the outstanding voting
securities," "assignment," "affiliated person," and "interested person," when
used in this Agreement, shall have the respective meanings specified, and shall
be construed in a manner consistent with, the Investment Company Act of 1940 and
the rules and regulations promulgated thereunder. Any question of interpretation
of any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Securities Act of 1933, or the Securities
Exchange Act of 1934 (collectively, the "Federal Securities Acts") shall be
resolved by reference to such term or provision of the Federal Securities Acts
and to interpretations thereof, if any, by United States federal courts or, in
the absence of any controlling decisions of any such court, by rules or
regulations of the Securities and Exchange Commission. Where the effect of a
requirement of the Federal Securities Acts reflected in any provision of this
Agreement is revised by rule or regulation of the Securities and Exchange
Commission, such provisions shall be deemed to incorporate the effect of such
rule or regulation.
ARTICLE 12. RECORD KEEPING. The Adviser will maintain records in a form
acceptable to the Trust and in compliance with the rules and regulations of the
Securities and Exchange Commission, including but not limited to records
required to be maintained by Section 31(a) of the Investment Company Act of 1940
and the rules thereunder, which at all times will be the property of the Trust
and will be available for inspection and use by the Trust.
ARTICLE 13. MISCELLANEOUS. (a) This Agreement contains the entire
understanding and agreement of the parties with respect to the subject matter
hereof.
(b) Headings in this Agreement are for ease of reference only and shall
not constitute a part of the Agreement.
(c) Should any portion of this Agreement for any reason be held void in
law or equity, the remainder of the Agreement shall be construed to the extent
possible as if such voided portion had never been contained herein.
(d) This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions thereof,
except that questions of interpretation shall be resolved in accordance with the
provisions of Article 11 above.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned
officers thereunto duly authorized, all as of the day and year first above
written. The undersigned officer of the Trust has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of a Fund, individually, but bind only the trust estate.
MFS SERIES TRUST XII,
on behalf of its series set forth in
Appendix A attached hereto
By:
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Secretary
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By:
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
APPENDIX A
FUNDS AND EFFECTIVE DATES
FUND EFFECTIVE DATE
---- --------------
MFS Lifetime Retirement Income Fund [_____________]
MFS Lifetime 2010 Fund [_____________]
MFS Lifetime 2020 Fund [_____________]
MFS Lifetime 2030 Fund [_____________]
MFS Lifetime 2040 Fund [_____________]
Appendix B
COMPENSATION TO THE ADVISER
The investment advisory fee payable by each Fund shall be computed and paid
monthly at the annual rate equal to that Fund's average daily net assets for its
then current fiscal year noted below:
FUND RATE
---- ----
MFS Lifetime Retirement Income Fund [_____________]
MFS Lifetime 2010 Fund [_____________]
MFS Lifetime 2020 Fund [_____________]
MFS Lifetime 2030 Fund [_____________]
MFS Lifetime 2040 Fund [_____________]
