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EXHIBIT 5
XXXX XXXXXXX WORLD TRUST
INVESTMENT MANAGEMENT CONTRACT
DATED MAY 5, 1987
AS AMENDED DECEMBER 19, 1989 SECTION 6 (SEE ATTACHED)
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XXXX XXXXXXX WORLD TRUST
WORLD BOND PORTFOLIO
PACIFIC BASIN EQUITIES PORTFOLIO
BOSTON, MASSACHUSETTS
May 5, 1987
Xxxx Xxxxxxx Advisers, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Investment Management Contract
Dear Sirs:
Xxxx Xxxxxxx World Trust (the "Trust") has been organized as a business
trust under the laws of the Commonwealth of Massachusetts to engage in the
business of an investment company. The Trust's shares of beneficial interest may
be classified into series, each series representing the entire undivided
interest in a separate portfolio of assets. As of the date hereof, the Trust has
two series of shares, World Bond Portfolio and Pacific Basin Equities Portfolio
(each, a "Fund" and, collectively, the "Funds"), each with a separate portfolio
of assets.
The Trustees of the Trust (the "Trustees") have selected you to provide
investment advice and management for the Trust and the Funds and to provide
certain other services, as more fully set forth below, and you are willing to
provide such advice, management and services under the terms and conditions
hereinafter set forth. Accordingly, the Trust agrees with you as follows:
1. Delivery of Documents. The Trust has furnished you with
copies, properly certified or otherwise authenticated, of each of the following:
(a) Declaration of Trust of the Trust, dated August 25, 1986 (the
"Declaration of Trust").
(b) By-Laws of the Trust as in effect on the date hereof.
(c) Resolutions of the Trustees selecting you as investment
adviser for the Trust and the Funds and approving the form of this Agreement.
(d) Resolutions of the Trustees selecting Xxxx Xxxxxxx Advisers
International, Limited as sub-adviser to you, the Trust and the Funds (the
"Sub-Adviser") and approving the
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form of the Sub-Adviser's contract with you,
the Trust and the Funds (the "Sub-Investment Management Contract").
(e) The Sub-Investment Management Contract.
(f) Commitments, limitations and undertakings made by the Trust
to state "blue sky" authorities for the purpose of qualifying shares of the
Trust and the Funds for sale in such states.
The Trust will furnish you from time to time with copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any.
2. Investment and Management Services. You will use you best
efforts to provide to each Fund continuing and suitable investment programs
consistent with the investment policies, objectives and restrictions of such
Fund. In the performance of your duties hereunder, subject always (x) to the
provisions contained in the documents delivered to you pursuant to Section I as
each of the same may from time to time be amended or supplemented and (y) to the
limitations set forth in the registration statement of the Trust as in effect
from time to time under the Securities Act of 1933, as amended, you will, at
your expense:
(a) furnish each Fund with advice and recommendations consistent
with the investment policies, objectives and restrictions of such Fund, with
respect to the purchase, holding and disposition of portfolio assets, including
advice on the selection and allocation of investments among the nations of the
world, and among equity and debt securities, and what portion of such assets, if
any, should be held in cash or cash equivalents, subject to the provisions of
the Sub-Investment Management Contract respecting the responsibilities of the
Sub-Adviser with respect to such portion of a Fund's assets as shall be
allocated pursuant to Section 3 of this Agreement to investments in countries
other than the U.S. and Canada ("Foreign Assets"), provided, however, that you
shall have sole responsibility for furnishing advice and recommendations with
respect to investments in the United States and Canada ("Domestic Assets").
(b) in consultation with the Sub-Adviser, advise the Funds with
respect to foreign currency matters having regard to foreign exchange controls,
if any, and forward foreign exchange contracts;
(c) advise each Fund in connection with policy decisions to be
made by the Trustees or any committee thereof with respect to such Fund's
investments in Domestic and Foreign Assets and, as requested, furnish such Fund
with research, economic and statistical data in connection with such Fund's
investments and investment policies;
(d) provide administration of the day-to-day investment
operations of each Fund;
(e) submit such reports relating to the valuation of each Fund's
securities as the Trustees may reasonably request;
(f) assist each Fund in any negotiations relating to its
investments with issuers, investment banking firms, securities brokers or
dealers and other institutions or investors;
(g) consistent with the provisions of Section 8 of the Agreement,
place orders for the purchase, sale or exchange of portfolio securities
consisting of Domestic and Foreign Assets for each Fund's accounts with brokers
or dealers selected by you, provided that in connection with the placing of such
orders and the selection of such brokers or dealers you shall seek to obtain
execution and pricing within the policy guidelines determined by the Trustees
and set forth in the Prospectus and Statement of Additional Information of the
Funds as in effect from time to time;
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(h) provide office space and office equipment and supplies, the
use of accounting equipment when required, and necessary executive, clerical and
secretarial personnel for the administration of the affairs of each Fund;
(i) from time to time or at any time requested by the Trustees,
make reports to the Trust of your performance of the foregoing services and
furnish advice and recommendations with respect to other aspects of the business
and affairs of each Fund;
(j) maintain and preserve the records required by the Investment
Company Act of 1940, as amended, to be maintained and preserved by the Trust on
behalf of each Fund (you agree that such records are the property of the Trust
and will be surrendered to the Trust promptly upon request therefor);
(k) obtain and evaluate such information relating to economies,
industries, businesses, securities markets and securities as you may deem
necessary or useful in the discharge of your duties hereunder;
(l) oversee and use your best efforts to assure the performance
of, the activities and services of each custodian, sub-custodian, transfer agent
and other similar agent retained by the Trust; and
(m) give instructions to the custodian and any sub-custodian of
each Fund as to deliveries of securities to and from such custodian or
sub-custodian, transfer of currencies and payments of cash for the account of
each Fund.
3. Allocation of Assets. Subject to the review of the Trustees,
you in consultation with the Sub-Adviser shall determine at least quarterly the
percentage of Fund's assets that shall be allocated to you or to the Sub-Adviser
for investment management (the "Asset Allocation) and the manner in which such
Asset Allocation in general is to be achieved by adjustments to the Fund's
existing portfolio of securities. The Asset Allocation will specify the
percentage of assets of the Fund allocated to you or to the Sub-Adviser for
management on the effective date of such determination and will apply to cash
inflow and outflow thereafter until the Asset Allocation is next redetermined.
If you and the Sub-Adviser cannot agree on an Asset Allocation, you have the
right to make the final determination, subject to review by the Trustees.
4. Expenses of the Funds. You will pay:
(a) the compensation and expenses of all officers and employees
of the Trust and the Funds, except as expressly paid by the Trust or the Funds,
either directly or by reimbursement of the Adviser, pursuant to Section 5(d);
(b) the expenses of office rent, telephone and other utilities,
office furniture, equipment, supplies, and other office expenses of the Trust
and the Funds;
(c) any other expenses incurred by you in connection with the
performance of your duties hereunder;
(d) premiums for such insurance as may be agreed upon by you and
the Trustees; and
(e) fees payable to the Sub-Adviser pursuant to the terms of the
Sub-Investment Management Contract.
5. Expenses of the Trust or the Funds Not Paid By You. You will
not be required to pay any expenses which this Agreement does not expressly make
payable to you. In particular,
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and without limiting the generality of the foregoing but subject to the
provisions of Section 4, you will not be required to pay:
(a) any and all expenses, taxes and governmental fees incurred by
the Trust or any Fund prior to the effective date of the first registration
statement of the Trust under the Securities Act of 1933, as amended;
(b) without limiting the generality of the foregoing clause (a),
the expenses of organizing the Trust and the Funds (including without limitation
legal, accounting and auditing fees and expenses incurred in connection with the
matters referred to in this clause (b), of registering the Trust under the
Investment Company Act of 1940, as amended, and of initially registering the
shares of the Trust under the Securities Act of 1933, as amended, and of
qualifying the shares for sale under state securities laws for the initial
offering and sale of the shares;
(c) the compensation and expenses of Trustees who are not
interested persons (as used in this Agreement, such term shall have the meaning
specified in the Investment Company Act of 1940, as amended) of you, and of
independent advisers, independent contractors, consultants, managers and other
unaffiliated agents employed by the Trust or the Funds other than through you;
(d) with respect to each Fund, the compensation, in the form of
salary, fringe benefits and incentive compensation of the Fund's Chairman of the
Board and President, the Fund's Secretary and the Fund's Compliance Officer who
provide administrative and compliance services to the Fund, the amount of such
compensation to be paid by the Fund to be determined from time to time by the
Trustees who are not interested persons, provided that such compensation paid by
the Fund will not exceed in any fiscal year 0.03% of the average daily net asset
value of the Fund during such year. Any such compensation to be paid by a Fund
will be accrued daily and, if paid by reimbursement of the Adviser, will be paid
quarterly or if paid directly will be paid from time to time at intervals to be
agreed upon by the Fund and the affected officers;
(e) legal, accounting and auditing fees and expenses of the Trust
or the Funds;
(f) the fees or disbursements of custodians and depositories of
the Trust's asset, transfer agents, disbursing agents, plan agents and
registrars;
(g) taxes and governmental fees assessed against the Trust's
assets and payable by the Trust;
(h) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of any Fund;
(i) brokers' commissions and underwriting fees; and
(j) the expense of periodic calculations of the net asset value
of the shares of the Funds.
6. Compensation of the Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by you as herein provided, for
each Fund, the Trust will pay you quarterly, based on the average daily net
asset value of such Fund for the preceding quarter, a fee at the annual rate of
.80% of the portion of the average daily net asset value of such Fund during
such quarter that does not exceed $200,000,000, and .70% of the portion, if any,
of the average daily net asset value of the Fund during such quarter that is in
excess of $200,000,000.
If in any fiscal year of a Fund, after excluding taxes, interest,
brokerage commissions and extraordinary expense beyond your control but
including only so much of the fee calculated pursuant to the foregoing
provisions of this paragraph 6 as is attributable to such fiscal year, the
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normal expenses of such Fund chargeable to its income account shall exceed the
greater of (a) the sum of (i) 1.5% of the first $30,000,000 of such Fund's daily
net average asset value in excess of $30,000,000, and (ii) 1.0% of such Fund's
daily not average asset value in excess of $30,000,000 and (b) 1.75% of the
Fund's daily average net asset value (subject to receipt of required approvals
of state securities commissioners), you will waive your fee payable under the
foregoing provisions of this paragraph 6 to the extent of such excess, and you
will reimburse such Fund for any amount by which such excess exceeds such fee.
The waiver and reimbursement contemplated by the foregoing sentence shall be
given effect by your paying such Fund an amount equal to the amount of such
waiver or reimbursement promptly after the end of such fiscal year. You
understand that, in connection with the qualification of securities of the Trust
for sale in certain states, the Trust has agreed, and may find it desirable to
agree in the future, that it will secure the consent of the securities
commissioners of certain states prior to treating any expense as an
extraordinary expense beyond your control within the meaning of the foregoing
sentence. Accordingly, you agree that no expense shall be so treated without the
consent of such commissioners. The net asset value of the Funds shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust and applicable law.
7. Other Activities of Adviser and Its Affiliates. Nothing herein
contained shall prevent you or any affiliate or associate of yours from engaging
in any other business or from acting as investment adviser or investment manager
for any other person or entity, whether or not having investment policies or
portfolios similar to that of any of the Funds; and it is specifically
understood that officers, directors, and employees of yours, of your
subsidiaries and those of your parent company, Xxxx Xxxxxxx Mutual Life
Insurance Company, may continue to engage in providing portfolio management
services and advice to other investment companies, whether or not registered, to
other investment advisory clients of yours, of your subsidiaries or of said
Insurance Company and to the said Insurance Company itself.
8. Avoidance of Inconsistent Position. In connection with
purchases or sales of portfolio securities for the account of the Trust, neither
you nor any investment management subsidiary of yours, nor any of your or their
directors, officers or employees will act as principal or agent or receive any
commission. If any occasion should arise in which you advise persons concerning
the shares of the Trust, you will act solely on your own behalf and not in any
way on behalf of the Trust or the Funds.
9. No Partnership or Joint Venture. The Trust, the Funds and
you are not partners of or joint venturers with each other and nothing herein
shall be construed so as to make them such partners or joint venturers or impose
any liability as such of any of them.
10. Name of Trust and Funds. The Trust and the Funds may use the
name "Xxxx Xxxxxxx" or any name derived from or similar to the name "Xxxx
Xxxxxxx Advisers, Inc." or "Xxxx Xxxxxxx Mutual Life Insurance Company" only for
so long as this Agreement or any extension, renewal, or amendment hereof remains
in effect. At such time as such Agreement shall no longer be in effect, the
Trust and the Funds will (to the extent they lawfully can) cease to use such a
name or any other name indicating that the Funds are advised by or they are
otherwise connected with you. The Trust acknowledges that it has adopted the
name "Xxxx Xxxxxxx World
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Trust" through permission of Xxxx Xxxxxxx Mutual Life Insurance Company, a
Massachusetts insurance company, and agrees that Xxxx Xxxxxxx Mutual Life
Insurance Company reserves to itself and any successor to its business the right
to grant the non-exclusive right to use the names "Xxxx Xxxxxxx" or any similar
name to any other corporation or entity, including but not limited to any
investment company of which Xxxx Xxxxxxx Mutual Life Insurance Company or any
subsidiary or affiliate thereof or any successor to the business of any thereof
shall be the investment adviser.
11. Limitation of Liability of Adviser. You shall not be liable
for any error of judgment or mistake of law of for any loss suffered by the
Trust or the Funds in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on your part in the performance of your duties or from reckless
disregard by you of your obligations and duties under this Agreement. Any
person, even though also employed by you, who may be or become an employee of
and paid by the Trust or the Funds shall be deemed, when acting within the scope
of his employment by the Trust or the Funds, to be acting in such employment
solely for the Trust or the Funds and not as your employee or agent.
12. Duration and Termination of this Agreement. This Agreement
shall remain in force until the second anniversary of the date upon which this
Agreement was executed by the parties hereto, and from year to year thereafter,
but only so long as such continuance is specifically approved at least annually
by (a) a majority of the Trustees who are not interested persons of you or
(other than as trustees) of the Trust, cast in person at a meeting called for
the purpose of voting on such approval, and (b) either (i) the Trustees or (ii)
with respect to each Fund, a majority of the outstanding voting securities of
such Fund. This Agreement may, on 60 days' written notice, be terminated at any
time by the Trustees without the payment of any penalty by the Trust or the
Funds, by vote with respect to each Fund, of a majority of the outstanding
voting securities of such Fund, or by you. Termination of this Agreement with
respect to a Fund shall not be deemed to terminate or otherwise invalidate any
provision of any Agreement between you and any other series of the Trust. This
Agreement shall automatically terminate in the event of its assignment. In
interpreting the provisions of this Section 12, the definitions contained in
Section 1 (a) of the Investment Company Act of 1940, as amended (particularly
the definitions of "assignment," "interested person" and "voting security")
shall be applied.
13. Amendment of This Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment, transfer,
assignment, sale, hypothecation or pledge of this Agreement shall be effective
until approved by (a) the Trustees, including a majority of the Trustees who are
not interested persons of you or (other than as trustees) of the Trust or any
Fund, cast in person at a meeting called for the purpose of voting on such
approval, and (b) with respect to each Fund, a majority of the outstanding
voting securities of such Fund, as defined in the Investment Company Act of
1940, as amended, provided that no approval shall be required pursuant to this
clause (b) in respect of any contract between you and the holders of outstanding
voting securities of any other series of the Trust.
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14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name Xxxx Xxxxxxx World Trust is the
designation of the Trustees under the Declaration of Trust, dated August 25,
1986, as amended from time to time. The Declaration of Trust has been filled
with the Secretary of State of the Commonwealth of Massachusetts. The
obligations of the Trust and the Funds are not personally binding upon, nor
shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Trust or the Funds, but only
the Trust's property shall be bound.
Yours very truly,
XXXX XXXXXXX WORLD TRUST
-- World Bond Portfolio
-- Pacific Basin Equities Portfolio
By /s/R. Xxxxx Xxxxxx
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Chairman of the Board
and President
The foregoing contract
is hereby agreed to as
of the date hereof.
XXXX XXXXXXX ADVISERS, INC.
By /s/R. Xxxxx Xxxxxx
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Vice Chairman of the Board,
President and Chief
Executive Officer
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