Exhibit (g)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 8th day of September, 1988, by and between
MUNIVEST FUND, INC., a Maryland corporation (hereinafter referred to as the
"Fund"), and FUND ASSET MANAGEMENT, INC., a Delaware corporation (hereinafter
referred to as the "Investment Adviser").
W I T N E S S E T H:
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WHEREAS, the Fund is engaged in business as a closed-end investment
company registered under the Investment Company Act of 1940, as amended
(hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Investment Adviser is engaged principally in rendering
management and investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940; and
WHEREAS, the Fund desires to retain the Investment Adviser to
provide management and investment advisory services to the Fund in the manner
and on the terms hereinafter set forth; and
WHEREAS, the Investment Adviser is willing to provide management and
investment advisory services to the Fund on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Investment Adviser hereby agree as
follows:
ARTICLE I
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Duties of the Investment Adviser
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The Fund hereby employs the Investment Adviser to act as a manager
and investment adviser of the Fund and to furnish, or arrange for affiliates
to furnish, the management and investment advisory services described below,
subject to the policies of, review by and overall control of the Board of
Directors of the Fund, for the period and on the terms and conditions set
forth in this Agreement. The Investment Adviser hereby accepts such employment
and agrees during such period, at its own expense, to render, or arrange for
the rendering of, such services and to assume the obligations herein set forth
for the compensation provided for herein. The Investment Adviser and its
affiliates shall for all purposes herein be deemed to be independent
contractors and shall, unless otherwise expressly provided or authorized, have
no authority to act for or represent the Fund in any way or otherwise be
deemed agents of the Fund.
(a) Management Services. The Investment Adviser shall perform (or
arrange for the performance by affiliates of) the management and
administrative services necessary for the operation of the Fund including
administering shareholder accounts and handling shareholder relations. The
Investment Adviser shall provide the Fund with office space, facilities,
equipment and necessary personnel and such other services as the Investment
Adviser, subject to review by the Board of Directors, shall from time to time
determine to be necessary or useful to perform its obligations under this
Agreement. The Investment Adviser shall also, on behalf of the Fund, conduct
relations with custodians, depositories, transfer agents, dividend disbursing
agents, other shareholder servicing agents, pricing agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers,
banks and such other persons in any such other capacity deemed to be necessary
or desirable. The Investment Adviser shall generally monitor the Fund's
compliance with investment policies and restrictions as set forth in filings
made by the Fund
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under the Federal securities laws. The Investment Adviser shall make reports
to the Board of Directors of its performance of obligations hereunder and
furnish advice and recommendations with respect to such other aspects of the
business and affairs of the Fund as it shall determine to be desirable.
(b) Investment Advisory Services. The Investment Adviser shall
provide the Fund with such investment research, advice and supervision as the
latter may from time to time consider necessary for the proper supervision of
the assets of the Fund, shall furnish continuously an investment program for
the Fund and shall determine from time to time which securities shall be
purchased, sold or exchanged and what portion of the assets of the Fund shall
be held in the various securities in which the Fund invests, options, futures,
options on futures or cash, subject always to the restrictions of the Articles
of Incorporation and By-Laws of the Fund, as amended from time to time, the
provisions of the Investment Company Act and the statements relating to the
Fund's investment objectives, investment policies and investment restrictions
as the same are set forth in filings made by the Fund under the Federal
securities laws. The Investment Adviser shall make decisions for the Fund as
to the manner in which voting rights, rights to consent to corporate action
and any other rights pertaining to the Fund's portfolio securities shall be
exercised. Should the Board of Directors at any time, however, make any
definite determination as to investment policy and notify the Investment
Adviser thereof in writing, the Investment 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 Investment
Adviser shall take, on behalf of the 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 for the Fund's account with brokers or
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dealers selected by it, and to that end, the Investment Adviser is authorized
as the agent of the Fund to give instructions to the Custodian of the Fund as
to deliveries of securities and payments of cash for the account of the Fund.
In connection with the selection of such brokers or dealers and the placing of
such orders with respect to assets of the Fund, the Investment Adviser is
directed at all times to seek to obtain execution and prices within the policy
guidelines determined by the Board of Directors and set forth in filings made
by the Fund under the Federal securities laws. Subject to this requirement and
the provisions of the Investment Company Act, the Securities Exchange Act of
1934, as amended, and other applicable provisions of law, the Investment
Adviser may select brokers or dealers with which it or the Fund is affiliated.
ARTICLE II
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Allocation of Charges and Expenses
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(a) The Investment Adviser. The Investment Adviser assumes and shall
pay for maintaining the staff and personnel necessary to perform its
obligations under this Agreement, and shall at its own expense, provide the
office space, facilities, equipment and necessary personnel which it is
obligated to provide under Article I hereof, and shall pay all compensation of
officers of the Fund and all Directors of the Fund who are affiliated persons
of the Investment Adviser.
(b) The Fund. The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund including, without limitation: taxes, expenses for
legal and auditing services, costs of printing proxies, stock certificates,
shareholder reports, prospectuses, charges of the Custodian, any Sub-Custodian
and Transfer Agent, expenses of portfolio transactions, Securities and
Exchange Commission fees, expenses of registering the shares under Federal,
state and foreign laws, fees and actual out-of-pocket expenses of Directors
who are not affiliated persons of the Investment Adviser, accounting and
pricing costs (including the calculation of the net
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asset value), insurance, interest, brokerage costs, litigation and other
extraordinary or non-recurring expenses, and other expenses properly payable
by the Fund. It is also understood that the Fund will reimburse the Investment
Adviser for its costs in providing accounting services to the Fund.
ARTICLE III
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Compensation of the Investment Adviser
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(a) Investment Advisory Fee. For the services rendered, the
facilities furnished and expenses assumed by the Investment Adviser, the Fund
shall pay to the Investment Adviser at the end of each calendar month a fee
based upon the average weekly value of the net assets of the Fund at the
annual rate of 0.50 of 1.0% (0.50%) of the average weekly net assets of the
Fund (i.e., the average weekly value of the total assets of the Fund, minus
the sum of accrued liabilities of the Fund and accumulated dividends on shares
of outstanding preferred stock), commencing on the day following effectiveness
hereof. For purposes of this calculation, average weekly net assets is
determined at the end of each month on the basis of the average net assets of
the Fund for each week during the month. The assets for each weekly period are
determined by averaging the net assets at the last business day of a week with
the net assets at the last business day of the prior week. It is understood
that the liquidation preference of any outstanding preferred stock (other than
accumulated dividends) is not considered a liability in determining the Fund's
average weekly net assets. If this 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
prorated in a manner consistent with the calculation of the fee as set forth
above. Subject to the provisions of subsection (b) hereof, payment of the
Investment Adviser's compensation for the preceding month shall be made as
promptly as possible after completion of the computations contemplated by
subsection (b) hereof. During any period when
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the determination of net asset value is suspended by the Board of Directors,
the average net asset value of a share for the last week prior to such
suspension shall for this purpose be deemed to be the net asset value at the
close of each succeeding week until it is again determined.
(b) Expense Limitations. In the event the operating expenses of the
Fund, including amounts payable to the Investment Adviser pursuant to
subsection (a) hereof, for any fiscal year ending on a date on which this
Agreement is in effect exceed the expense limitations applicable to the Fund
imposed by applicable state securities laws or regulations thereunder, as such
limitations may be raised or lowered from time to time, the Investment Adviser
shall reduce its management and investment advisory fee by the extent of such
excess and, if required pursuant to any such laws or regulations, will
reimburse the Fund in the amount of such excess; provided, however, to the
extent permitted by law, there shall be excluded from such expenses the amount
of any interest, taxes, brokerage commissions and extraordinary (including but
not limited to legal claims and liabilities and litigation costs and any
indemnification related thereto) paid or payable by the Fund. Whenever the
expenses of the Fund exceed a pro rata portion of the applicable annual
expense limitations, the estimated amount of reimbursement under such
limitations shall be applicable as an offset against the monthly payment of
the fee due to the Investment Adviser. Should two or more such expenses
limitations be applicable as at the end of the last business day of the month,
that expense limitation which results in the largest reduction in the
Investment Adviser's fee shall be applicable.
ARTICLE IV
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Limitation of Liability of the Investment Adviser
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The Investment 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 management of the Fund, except for willful misfeasance, bad
faith or gross negligence in the performance of its
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duties, or by reason of reckless disregard of its obligations and duties
hereunder. As used in this Article IV, the term "Investment Adviser" shall
include any affiliates of the Investment Adviser performing services for the
Fund contemplated hereby and directors, officers and employees of the
Investment Adviser and such affiliates.
ARTICLE V
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Activities of the Investment Adviser
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The services of the Investment Adviser to the Fund are not to be
deemed to be exclusive: the Investment Adviser and any person controlled by or
under common control with the Investment Adviser (for purposes of the Article
V referred to as "affiliates") are free to render services to others. It is
understood that Board of Directors, officers, employees and shareholders of
the Fund are or may become interested in the Investment Adviser and its
affiliates, as directors, officers, employees, partners, and shareholders or
otherwise and that directors, officers, employees, partners, and shareholders
of the Investment Adviser and its affiliates are or may become similarly
interested in the Fund, and that the Investment Adviser and directors,
officers, employees, partners, and shareholders of its affiliates may become
interested in the Fund as shareholder or otherwise.
ARTICLE VI
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Duration and Termination of this Agreement
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This Agreement shall become effective as of the date first above
written and shall remain in force until August 31, 1990 and thereafter, but
only so long as such continuance is specifically approved at least annually by
(i) the Board of Directors of the Fund, or by the vote of a majority of the
outstanding voting securities of the Fund, and (ii) a majority of those
Directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on
such approval.
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This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Directors or by vote of a majority of the
outstanding voting securities of the Fund, or by the Investment Adviser, on
sixty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment.
ARTICLE VII
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Amendments of this Agreement
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This Agreement may be amended by the parties only if such amendment
is specifically approved by (i) the vote of a majority of outstanding voting
securities of the Fund, and (ii) a majority of those Directors who are not
parties to this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such approval.
ARTICLE VIII
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Definitions of Certain Terms
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The terms "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 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.
ARTICLE IX
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Governing Law
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This Agreement shall be construed in accordance with laws of the
State of New York and the applicable provisions of the Investment Company Act.
To the extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
MUNIVEST FUND, INC.
By:
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{Authorized Signatory)
FUND ASSET MANAGEMENT, INC.
By:
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{Authorized Signatory)
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SUPPLEMENT TO INVESTMENT ADVISORY AGREEMENT
WITH
FUND ASSET MANAGEMENT
As of January 1, 1994 Fund Asset Management was reorganized as a limited
partnership, formally known as Fund Asset Management, L.P. ("FAM"). The
general partner of FAM is Princeton Services, Inc. and the limited partners
are Fund Asset Management, Inc. and Xxxxxxx Xxxxx & Co, Inc. Pursuant to Rule
202 (a) (I)-1 under the Investment Advisors Act of 1940 and Rule 2a-6 under
the Investment Company Act of 1940, such reorganization did not constitute an
assignment of this investment advisory agreement since it did not involve a
change of control or management of the investment adviser. Pursuant to the
requirements of Section 205 of the investment Advisers Act of 1940, however,
Fund Asset Management hereby supplements this investment advisory agreement by
undertaking to advise you of any change in the membership of the partnership
within a reasonable time after any such change occurs.
By:
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Dated: January 3, 1994
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