EXHIBIT NO. 99(g)(1)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 10th day of November, 1989, by and
between MFS SPECIAL VALUE TRUST, a Massachusetts business trust (the "Trust")
and Massachusetts Financial Services Company, a Delaware corporation (the
"Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as a closed-end investment company
registered under the Investment Company Act of 1940; and
WHEREAS, the adviser is willing to provide business management services to the
Trust 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:
1. Duties of the Adviser. The Adviser shall provide the Trust with such
investment advice and supervision as the latter may from time to time consider
necessary for the proper supervision of its funds. The Adviser shall act as
Adviser to the Trust 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 Trust shall
be held uninvested, subject always to the restrictions of its Declaration of
Trust, dated September 29, 1989, and By-Laws, as each may be amended from time
to time (respectively the "Declaration" and "By-Laws"), to the provisions of the
Investment Company Act of 1940 and the Rules, Regulations and orders thereunder,
and to the Trust's then-current Prospectus. 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 Trust'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determination has been revoked.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 Trust,
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 Trust's account with brokers or dealers selected by
it, and to that end the Adviser is authorized as the agent of the Trust to give
instructions to the Custodian of the Trust as to deliveries of securities and
payments of cash for the account of the Trust. In connection with the selection
of such brokers or dealers and the placing of such orders, the Adviser is
directed to seek for the Trust execution at the best available price. Subject to
this requirement of seeking the best available price, securities may be bought
from or sold to broker dealers who have furnished statistical, research and
other information or services to the Adviser.
2. Allocation of Charges and Expenses. The Adviser shall furnish its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Trust and maintaining its organization, and investment advisory facilities and
executive and supervisory personnel for managing the investments and effecting
the portfolio transactions of the Trust. 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. It is understood that the Trust 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 Trust; fees and expenses of
independent auditors, of legal counsel and of any transfer agent, registrar or
dividend dispursing agent of the Trust; expenses of servicing shareholder
accounts; expenses of preparing, printing and mailing share 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 the
"Trust" including safekeeping of funds and securities and maintaining required
books and accounts; expenses of calculating the net asset value of shares of the
Trust; expenses of shareholder meetings; and expenses relating to the issuance,
registration and qualification of shares of the Trust 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).
3. Compensation of the Adviser. For the services to be rendered and
the facilities to be provided, the Trust shall pay
to the Adviser, out of the assets of the Trust an investment advisory fee
computed and paid monthly in an amount equal to the sum of .68% of the Trust's
average daily net assets and 3.40% of the Trust's gross income (i.e., income
other than gains from the sale of securities, gains from options and futures
transactions, premium income from options written and gains from foreign
exchange transactions) in each case on an annual basis for the Trust's
then-current fiscal year. If the Adviser shall serve for less than the whole of
any period specified in this Article 3, the compensation to the Adviser will be
prorated.
4. Covenants of the Adviser. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust principal
underwriter, if any, as principals in making purchases or sales of securities or
other property for the account of the Trust, except as permitted by the
Investment Company Act of 1940 and the Rules, Regulations or orders thereunder,
will not take a long or short position in the shares of the Trust except as
permitted by the Declaration, and will comply with all other provisions of the
Declaration and By-Laws and the then-current Prospectus of the Trust relative to
the Adviser and its directors and officers.
5. Limitation of Liability of the Adviser. The Adviser shall not be
liable for any error of judgement 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 Trust, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its duties and
obligations hereunder. As used in this Section 5, the term "Adviser" shall
include directors, officers and employees of the Adviser as well as that
corporation itself.
6. Activities of the Adviser. The services of the Adviser to the Trust
are not to be deemed to be exclusive, the Adviser being free to render
investment advisory and/or other services to others. The Adviser may permit
other fund clients to use the initials "MFS" in their names. The Trust agrees
that if the Adviser shall for any reason no longer serve as the Adviser to the
Trust, the Trust will change its name so as to delete the initials "MFS". It is
understood that 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 the Trust as a
shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force until August 1, 1991, on which date it will terminate unless its
continuance after August 1, 1991 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 Trust.
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 Trust, 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".
This Agreement may be amended only if such amendment is approved by "vote of a
majority of the outstanding voting securities" of the Trust.
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 in, and shall be construed in a manner consistent with, 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 hereto have caused this Agreement to be executed
and delivered in their names and on their behalf by the undersigned, thereunder
duly authorized, all as of the day and year first above written. The undersigned
Trustee of the Trust has executed this Agreement not individually, but as
Trustee under the Declaration and the obligations of this Agreement are not
binding upon any of the Trustees or shareholders of the Trust, individually, but
bind only the trust estate.
MFS SPECIAL VALUE TRUST
By: A. XXXXX XXXXXXX
A. Xxxxx Xxxxxxx
Chairman and Trustee
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: A. XXXXX XXXXXXX
A. Xxxxx Xxxxxxx
President
