EX-99.B.5
INVESTMENT ADVISORY AGREEMENT
between
THE XXXXXXXX GLOBAL EQUITY FUND
and
XXXXXXXX & XXXXXXXX ASSET MANAGEMENT, INC.
INVESTMENT ADVISORY AGREEMENT, dated as of June 28, 1999, by
and between THE XXXXXXXX GLOBAL EQUITY FUND, a Delaware business trust (the
"Fund"), and XXXXXXXX & XXXXXXXX ASSET MANAGEMENT, INC. ( "Xxxxxxxx &
XxXxxxxx").
W I T N E S S E T H
WHEREAS, the Fund is engaged in business as a open-end
investment company registered under the Investment Company Act of 1940
(collectively with the rules and regulations promulgated thereunder, the "Act");
and
WHEREAS, Xxxxxxxx & XxXxxxxx is an investment adviser under
the Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment adviser; and
WHEREAS, the Fund wishes to engage Xxxxxxxx & XxXxxxxx to
provide certain investment advisory services for the Fund, and Xxxxxxxx &
XxXxxxxx is willing to provide such services for the Fund on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is hereby agreed by and between the
parties hereto as follows:
1. Appointment.
Xxxxxxxx & XxXxxxxx agrees, all as more fully set forth
herein, to act as investment adviser to the Fund with respect to the investment
of its assets and to supervise and arrange the purchase of securities for and
the sale of securities held in the portfolio of the Fund.
2. Duties and Obligations of Xxxxxxxx & XxXxxxxx With
Respect to the Investment of Assets of the Fund.
(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Trustees of the Fund,
Xxxxxxxx & XxXxxxxx shall:
(i) monitor continuously the investment program
of the Fund and the composition of its
portfolio;
(ii) determine what securities shall be purchased
or sold for the portfolio of the Fund;
(iii) arrange for the purchase and the sale of
securities held in the portfolio of the
Fund;
(iv) provide information to the Board of Trustees
regarding the portfolio of the Fund; and
(v) supervise, together with the Administrator,
the operations of the Fund.
(b) Any services furnished by Xxxxxxxx & XxXxxxxx under this
section shall at all times conform to, and be in accordance with, any
requirements imposed by:
(i) the provisions of the Act;
(ii) any other applicable provisions of state and
Federal law;
(iii) the provisions of the Fund's Declaration of
Trust and By-Laws, as amended from time to
time;
(iv) any policies and determinations of the Board
of Trustees of the Fund; and
(v) the fundamental policies of the Fund, as
reflected in its Registration Statement
under the Act, as amended from time to time.
(c) Xxxxxxxx & XxXxxxxx shall give the Fund the benefit of its
best judgment and effort in rendering services hereunder, and in connection
therewith Xxxxxxxx & XxXxxxxx shall not be liable to the Fund or its security
holders 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 of portfolio
transactions for the Fund, except for wilful misfeasance, bad faith or gross
negligence in the
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performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder. As used in this subsection (c), the term "Xxxxxxxx &
XxXxxxxx" shall include board members, officers and employees of Xxxxxxxx &
XxXxxxxx as well as the entity referred to as "Xxxxxxxx & XxXxxxxx" itself.
(d) Nothing in this Agreement shall prevent Xxxxxxxx &
XxXxxxxx or any affiliated person (as defined in the Act) of Xxxxxxxx & XxXxxxxx
from acting as investment adviser or manager for any other person, firm or
corporation (including other investment companies) and shall not in any way
limit or restrict Xxxxxxxx & XxXxxxxx or any such affiliated person from buying,
selling or trading any securities for its or their own accounts or for the
accounts of others for whom it or they may be acting; provided, however, that
Xxxxxxxx & XxXxxxxx expressly represents that it will undertake no activities
which, in its judgment, will adversely affect the performance of its obligations
to the Fund under this Agreement. Xxxxxxxx & XxXxxxxx agrees that it will not
deal with itself, or with the Trustees of the Fund or the Fund's principal
underwriter or distributor, as principals in making purchases or sales of
securities or other property for the account of the Fund, except as permitted by
the Act, and will comply with all other provisions of the Fund's Declaration of
Trust and By-Laws and the then-current prospectus and statement of additional
information applicable to the Fund relative to Xxxxxxxx & XxXxxxxx and its board
members and officers.
(e) The Fund will supply Xxxxxxxx & XxXxxxxx with certified
copies of the following documents: (i) the Fund's Declaration of Trust and
By-Laws, as amended; (ii) resolutions of the Fund's Board of Trustees and
shareholders authorizing the appointment of Xxxxxxxx & XxXxxxxx and approving
this Agreement; (iii) the Fund's Registration Statement, as filed with the
Securities and Exchange Commission; and (iv) the Fund's most recent prospectus
and statement of additional information. The Fund will furnish Xxxxxxxx &
XxXxxxxx promptly with copies of all amendments or supplements to the foregoing,
if any, and all documents, notices and reports filed with the Securities and
Exchange Commission.
(f) The Fund will supply, or cause its custodian bank to
supply, to Xxxxxxxx & XxXxxxxx such financial information as is necessary or
desirable for the functions of Xxxxxxxx & XxXxxxxx hereunder.
3. Broker-Dealer Relationships.
Xxxxxxxx & XxXxxxxx is responsible for decisions to buy and
sell securities for the portfolio of the Fund, broker-dealer selection and
negotiation of its brokerage commission rates. Xxxxxxxx & XxXxxxxx'x primary
consideration in effecting a security transaction will be execution at the most
favorable price. The Fund understands that many of the Fund's portfolio
transactions will be transacted with primary market makers acting as principal
on a net basis, with no brokerage commissions being paid by the Fund. Such
principal transactions may, however, result in a profit to the market makers. In
certain instances, Xxxxxxxx & XxXxxxxx may make purchases of underwritten issues
at prices which include underwriting fees. In
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selecting a broker or dealer to execute each particular transaction, Xxxxxxxx &
XxXxxxxx will take the following into consideration: the best price available;
the reliability, integrity and financial condition of the broker or dealer; the
size of and difficulty in executing the order; and the value of the expected
contribution of the broker or 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 or dealer if the
difference is reasonably justified by other aspects of the portfolio execution
services offered. Subject to such policies as the Board of Trustees may
determine, Xxxxxxxx & XxXxxxxx 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 Xxxxxxxx & XxXxxxxx 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 Xxxxxxxx & XxXxxxxx determines 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 Xxxxxxxx & XxXxxxxx'x overall responsibilities with
respect to the Fund. Xxxxxxxx & XxXxxxxx is further authorized to allocate the
orders placed by it on behalf of the Fund to an affiliated broker-dealer, if
any, or to such brokers and dealers who also provide research or statistical
material, or other services to the Fund (which material or services may also
assist Xxxxxxxx in rendering services to other clients). Such allocation shall
be in such amounts and proportions as Xxxxxxxx & XxXxxxxx shall determine and
Xxxxxxxx & XxXxxxxx will report on said allocations regularly to the Board of
Trustees of the Fund indicating the brokers to whom such allocations have been
made and the basis therefor.
4. Allocation of Expenses.
Xxxxxxxx & XxXxxxxx agrees that it will furnish the Fund, at
its expense, all office space and facilities, equipment and clerical personnel
necessary for carrying out its duties under this Agreement. Xxxxxxxx & XxXxxxxx
agrees that it will supply to the Administrator of the Fund all necessary
financial information in connection with the Administrator's duties under any
agreement between the Administrator and the Fund on behalf of the Fund. All
costs and expenses associated with any administrative functions delegated by
Xxxxxxxx & XxXxxxxx to the Administrator that are not pursuant to any agreement
between the Administrator and the Fund or Xxxxxxxx & XxXxxxxx and the Fund will
be paid by Xxxxxxxx & XxXxxxxx. All other costs and expenses not expressly
assumed by Xxxxxxxx & XxXxxxxx under this Agreement or by the Administrator
under the Administration Agreement between it and the Fund on behalf of the Fund
shall be paid by the Fund from the assets of the Fund, including, but not
limited to (i) fees paid to Xxxxxxxx & XxXxxxxx and the Administrator; (ii)
interest and taxes; (iii) brokerage commissions; (iv) insurance premiums; (v)
compensation and expenses of the trustees other than those affiliated with
Xxxxxxxx & XxXxxxxx or the Administrator; (vi) legal, accounting and audit
expenses; (vii) fees and expenses of any transfer agent, distributor, registrar,
dividend disbursing agent or shareholder servicing agent of the Fund; (viii)
expenses, including clerical expenses, incident to the issuance, redemption or
repurchase of shares of the Fund, including issuance on
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the payment of, or reinvestment of, dividends; (ix) fees and expenses incident
to the registration under Federal or state securities laws of the Fund or its
shares; (x) expenses of preparing, setting in type, printing and mailing
prospectuses, statements of additional information, reports and notices and
proxy material to shareholders of the Fund; (xi) all other expenses incidental
to holding meetings of the Fund's trustees and shareholders; (xii) expenses
connected with the execution, recording and settlement of portfolio securities
transactions; (xiii) fees and expenses of the Fund's custodian for all services
to the Fund, including safekeeping of funds and securities and maintaining
required books and accounts; (xiv) expenses of calculating net asset value of
the shares of the Fund; (xv) industry membership fees allocable to the Fund; and
(xvi) such extraordinary expenses as may arise, including litigation affecting
the Fund and the legal obligations which the Fund may have to indemnify the
officers and directors with respect thereto.
5. Compensation of Xxxxxxxx & XxXxxxxx.
For the services to be rendered, the Fund shall pay to
Xxxxxxxx & XxXxxxxx from the assets of the Fund an investment advisory fee paid
monthly at an annual rate equal to 0.75% of the Fund's average weekly net assets
for the Fund's then-current fiscal year. Except as hereinafter set forth,
compensation under this Agreement shall be calculated and accrued daily and the
amounts of the daily accruals shall be paid monthly. If the Agreement becomes
effective subsequent to the first day of a month or shall terminate before the
last day of a month, compensation for that part of the month this Agreement is
in effect shall be pro rated in a manner consistent with the calculation of the
fees as set forth above. Payment of Xxxxxxxx & XxXxxxxx'x compensation for the
preceding month shall be made within five days after the end of that month.
6. Duration, Amendment and Termination.
(a) This Agreement shall go into effect as to the Fund on the
date set forth above (the "Effective Date") and shall, unless terminated as
hereinafter provided, continue in effect for two years from the Effective Date
and shall continue from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the Board of Trustees
of the Fund, including the vote of a majority of the trustees who are not
parties to this Agreement or "interested persons" (as defined in the Act) of any
such party cast in person at a meeting called for the purpose of voting on such
approval, or by the vote of the holders of a "majority" (as so defined) of the
outstanding voting securities of the Fund and by such a vote of the trustees.
(b) This Agreement may be amended only if such amendment is
approved by the vote of the holders of a "majority" (as defined in the Act) of
the outstanding voting securities of the Fund.
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(c) This Agreement may be terminated by Xxxxxxxx & XxXxxxxx at
any time without penalty upon giving the Fund sixty (60) days' written notice
(which notice may be waived by the Fund) and may be terminated by the Fund at
any time without penalty upon giving Xxxxxxxx sixty (60) days' written notice
(which notice may be waived by Xxxxxxxx & XxXxxxxx), provided that such
termination by the Fund shall be approved by the vote of a majority of all the
trustees in office at the time or by the vote of the holders of a "majority" (as
defined in the Act) of the voting securities of the Fund at the time outstanding
and entitled to vote. This Agreement shall automatically terminate in the event
of its "assignment" (as defined in the Act).
7. Board of Trustees' Meeting.
The Fund agrees that notice of each meeting of the Board of
Trustees of the Fund will be sent to Xxxxxxxx & XxXxxxxx and that the Fund will
make appropriate arrangements for the attendance (as persons present by
invitation) of such person or persons as Xxxxxxxx & XxXxxxxx may designate.
8. Name.
The Fund hereby acknowledges that any and all rights in or to
the name "Xxxxxxxx" which exist on the date of this Agreement or which may arise
hereafter are, and under any and all circumstances shall continue to be, the
sole property of Xxxxxxxx & XxXxxxxx; that Xxxxxxxx & XxXxxxxx may assign any or
all of such rights to another party or parties without the consent of the Fund;
and that Xxxxxxxx & XxXxxxxx may permit other parties, including other
investment companies, to use the word "Xxxxxxxx" in their names. If Xxxxxxxx &
XxXxxxxx, or its assignee as the case may be, ceases to serve as an adviser to
the Fund, the Fund hereby agrees to take promptly any and all actions which are
necessary or desirable to change its name and the name of the Fund so as to
delete the word "Xxxxxxxx".
9. 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.
10. 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 Act, as amended, 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 Act,
reflected in any provision of this
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Agreement, is revised by rule, regulation or order of the Securities and
Exchange Commission, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
11. This Agreement shall be construed in accordance with the
laws of the State of Delaware, without regard to the conflicts of law provisions
thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
THE XXXXXXXX GLOBAL EQUITY FUND
By /s/ Xxxxxx X. XxXxxxxx
------------------------------------------
Title: President
XXXXXXXX & XXXXXXXX ASSET MANAGEMENT, INC.
By /s/ Xxxxxx X. XxXxxxxx
------------------------------------------
Title: President
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