Exhibit (d)(1)
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 18th day of September, 2003, by and
between The Tocqueville Trust, a Massachusetts business trust (the "Trust"), on
behalf of its series The Tocqueville Genesis Fund (the "Fund"), and Tocqueville
Asset Management L.P., a limited partnership (the "Investment Adviser");
W I T N E S S E T H
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WHEREAS, the Trust is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations
promulgated thereunder; and
WHEREAS, the Investment Adviser is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Investment
Advisers Act"), and engages in the business of acting as an investment adviser;
and
WHEREAS, the Trust and the Investment Adviser desire to enter
into an agreement to provide for the management of the assets of the Fund on the
terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Management. The Investment Adviser shall act as investment
adviser for the Fund and shall, in such capacity, supervise the investment and
reinvestment of the cash, securities or other properties comprising the Fund's
assets, subject at all times to the policies and control of the Trust's Board of
Trustees. The Investment Adviser shall give the Fund the benefit of its best
judgment, efforts and facilities in rendering its services as investment
adviser. The Investment Adviser shall, for all purposes herein, be deemed an
independent contractor and shall have, unless otherwise expressly provided or
authorized, no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
2. Duties of Investment Adviser. In carrying out its obligations
under paragraph 1 hereof, the Investment Adviser shall:
(a) supervise and manage all aspects of the Fund's
operations;
(b) provide the Fund or obtain for it, and thereafter
supervise, such executive, administrative, clerical and shareholder servicing
services as are deemed advisable by the Trust's Board of Trustees;
(c) arrange, but not pay for, the periodic updating of
prospectuses and supplements thereto, proxy material, tax returns, reports to
the Fund's shareholders and reports to and filings with the Securities and
Exchange Commission, and state Blue Sky authorities;
(d) provide the Fund with, or obtain for it, adequate
office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items for
the Fund's principal office;
(e) provide the Board of Trustees of the Trust on a
regular basis with financial reports and analyses on the Fund's operations and
the operations of comparable investment companies;
(f) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the Fund, and
whether concerning the individual issuers whose securities are included in the
Fund or the activities in which they engage, or with respect to securities which
the Investment Adviser considers desirable for inclusion in the Fund;
(g) determine what issuers and securities shall be
represented in the Fund's portfolio and regularly report them to the Board of
Trustees of the Trust;
(h) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers and regularly report
thereon to the Board of Trustees of the Trust; and
(i) take, on behalf of the Fund, all actions which appear
to the Fund necessary to carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including the placing of orders for the
purchase and sale of portfolio securities.
3. Broker-Dealer Relationships. The Investment Adviser is
responsible for decisions to buy and sell securities for the Fund, broker-dealer
selection, and negotiation of brokerage commission rates. The Investment
Adviser's primary consideration in effecting a security transaction will be
execution at a price that is reasonable and fair compared to the commission, fee
or other remuneration received or to be received by other brokers in connection
with comparable transactions including similar securities being purchased or
sold on a securities exchange during a comparable period of time.
In selecting a broker-dealer to execute each particular
transaction, the Investment Adviser will take the following into consideration:
the best net price available; the reliability, integrity and financial condition
of the broker-dealer; the size of and difficulty in executing the order; and the
value of the expected contribution of the broker-dealer to the investment
performance of the Fund on a continuing basis. Accordingly, the price to the
Fund in any transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other aspects of the
portfolio execution services offered. Subject to such policies and procedures as
the Board of Trustees may determine, the Investment 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 the Fund to pay a broker or
dealer that provides brokerage and research services to the Investment Adviser
for the Fund's use an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Investment Adviser
determines in good faith that such amount of commission was reasonable in
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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
Investment Adviser's overall responsibilities with respect to the Fund. The
Investment Adviser is further authorized to allocate the orders placed by it on
behalf of the Fund to such brokers and dealers who also provide research or
statistical material, or other services to the Fund or the Investment Adviser
for the Fund's use. Such allocation shall be in such amounts and proportions as
the Investment Adviser shall determine and the Investment Adviser will report on
said allocations regularly to the Board of Trustees of the Trust indicating the
brokers to whom such allocations have been made and the basis therefor.
4. Control by Board of Trustees. Any investment program
undertaken by the Investment Adviser pursuant to this Agreement, as well as any
other activities undertaken by the Investment Adviser on behalf of the Fund
pursuant thereto, shall at all times be subject to any directives of the Board
of Trustees of the Trust.
5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Investment Adviser shall at all times
conform to:
(a) all applicable provisions of the Investment Company
Act and the Investment Advisers Act and any rules and regulations adopted
thereunder as amended; and
(b) the provisions of the Registration Statements of the
Fund under the Securities Act of 1933 and the Investment Company Act; and
(c) the provisions of the Declaration of Trust of the
Trust, as amended; and
(d) the provisions of the By-laws of the Trust, as
amended; and
(e) any other applicable provisions of state and federal
law.
6. Expenses. The expenses connected with the Fund shall be
allocable between the Fund and the Investment Adviser as follows:
(a) The Investment Adviser shall furnish, at its expense
and without cost to the Fund, the services of a President, Secretary and one or
more Vice Presidents of the Trust, to the extent that such additional officers
may be required by the Trust for the proper conduct of its affairs.
(b) The Investment Adviser shall further maintain, at its
expense and without costs to the Fund, a trading function in order to carry out
its obligations under subparagraph (i) of paragraph 2 hereof to place orders for
the purchase and sale of portfolio securities for the Fund.
(c) Nothing in subparagraph (a) hereof shall be construed
to require the Investment Adviser to bear:
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(i) any of the costs (including applicable office space,
facilities and equipment) of the services of a principal
financial officer of the Trust whose normal duties consist of
maintaining the financial accounts and books and records of the
Fund; including the reviewing of calculations of net asset value
and preparing tax returns; or
(ii) any of the costs (including applicable office space,
facilities and equipment) of the services of any of the personnel
operating under the direction of such principal financial
officer. Notwithstanding the obligation of the Fund to bear the
expense of the functions referred to in clauses (i) and (ii) of
this subparagraph (c), the Investment Adviser may pay the
salaries, including any applicable employment or payroll taxes
and other salary costs, of the principal financial officer and
other personnel carrying out such functions and the Fund shall
reimburse the Investment Adviser therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the
operations of the Fund and the offering of its shares shall be borne by the Fund
unless specifically provided otherwise in this paragraph 6. These expenses
include but are not limited to brokerage commissions, legal, auditing, taxes or
governmental fees, the cost of preparing share certificates, custodian,
depository, transfer and shareholder service agent costs, expenses of issue,
sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, insurance premiums on property or personnel
(including officers and trustees if available) of the Fund which inure to its
benefit, expenses relating to trustee and shareholder meetings, the cost of
preparing and distributing reports and notices to shareholders, the fees and
other expenses incurred by the Fund in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to shareholders.
7. Compensation. The Fund shall pay the Investment Adviser in
full compensation for services rendered hereunder an annual investment advisory
fee, payable monthly, of 1.25% of the Fund's average daily net assets on the
first $1 billion and 1.00% of the Fund's average daily net assets in excess of
$1 billion. The average daily net asset value of the Fund shall be determined in
the manner set forth in the Declaration of Trust and Prospectus of the Fund.
8. Non-Exclusivity. The services of the Investment Adviser to the
Fund are not to be deemed to be exclusive, and the Investment Adviser shall be
free to render investment advisory and corporate administrative or other
services to others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers or Partners of the
Investment Adviser may serve as officers or trustees of the Trust, and that
officers or trustees of the Trust may serve as officers or partners of the
Investment Adviser to the extent permitted by law; and that the officers and
partners of the Investment Adviser are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers or partners of any other firm or corporation,
including other investment companies.
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9. Term and Approval. This Agreement shall become effective at
the close of business on October 8, 2003, and shall remain in force and effect
for two years and thereafter from year to year, provided that such continuance
is specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the
vote of a majority of the Fund's outstanding voting securities (as defined in
Section 2(a)(42) of the Investment Company Act); and
(b) by the affirmative vote of a majority of the Trustees
who are not parties to this Agreement or interested persons of a party to this
Agreement (other than as trustees of the Trust), by votes cast in person at a
meeting specifically called for such purpose.
10. Termination. This Agreement may be terminated at any time,
without the payment of any penalty, by vote of the Trust's Board of Trustees or
by vote of a majority of the Fund's outstanding voting securities, or by the
Investment Adviser, on sixty (60) days' written notice to the other party. The
Notice provided for herein may be waived by either party. This Agreement shall
automatically terminate in the event of its assignment, the term "assignment"
for the purpose having the meaning defined in Section 2(a)(4) of the Investment
Company Act.
11. Liability of Investment Adviser and Indemnification. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Investment
Adviser or any of its officers, partners or employees, it shall not be subject
to liability to the Fund or to any shareholder of the Fund for any omission in
the course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
12. Liability of Trustees and Shareholders. A copy of the
Agreement and Declaration of Trust of the Trust is on file with the Secretary of
The Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the trustees of the Trust as trustees and
not individually and that the obligations of this instrument are not binding
upon any of the trustees or shareholders individually but are binding only upon
the assets and property of the Fund.
13. Notices. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the other party at
such address as such other party may designate for the receipt of such notice.
Until further notice to the other party, it is agreed that the address of the
Fund and that of the Investment Adviser shall be 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
14. Questions of Interpretation. 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 shall be resolved
by reference to such term or provision of the Act and to interpretations
thereof, if any, by the United States Courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of the
Securities and Exchange Commission issued pursuant to said Act. In addition,
where the effect of a requirement of the Investment Company Act reflected in any
provision of this Agreement is
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released by rules, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in duplicate by their respective officers on the day and year
first above written.
THE TOCQUEVILLE TRUST,
on behalf of The Tocqueville Genesis Fund
By:/s/ Xxxxxx X. Xxxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxxx
President
TOCQUEVILLE ASSET MANAGEMENT L.P.
By:/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Chief Operating Officer
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