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INVESTMENT MANAGEMENT SERVICES AGREEMENT
AGREEMENT made the 13th day of November, 1996, by and between
World Trust (the "Trust"), a Massachusetts business trust, on
behalf of its underlying series portfolios: Emerging Markets
Portfolio and World Technologies Portfolio (individually, a
"Portfolio" and collectively the "Portfolios"); and American
Express Financial Corporation (the "Advisor"), a Delaware
corporation.
Part One: INVESTMENT MANAGEMENT AND OTHER SERVICES
(1) The Trust hereby retains the Advisor, and the Advisor
hereby agrees, for the period of this Agreement and under the terms
and conditions hereinafter set forth, to furnish the Portfolios
continuously with suggested investment planning; to determine,
consistent with the Portfolios' investment objectives and policies,
which securities in the Advisor's discretion shall be purchased,
held or sold and to execute or cause the execution of purchase or
sell orders; to prepare and make available to the Portfolios all
necessary research and statistical data in connection therewith; to
furnish all services of whatever nature required in connection with
the management of the Portfolios as provided under this Agreement;
and to pay such expenses as may be provided for in Part Three;
subject always to the direction and control of the Board of
Trustees (the "Board"), the Executive Committee and the authorized
officers of the Trust. The Advisor agrees to maintain an adequate
organization of competent persons to provide the services and to
perform the functions herein mentioned. The Advisor agrees to meet
with any persons at such times as the Board deems appropriate for
the purpose of reviewing the Advisor's performance under this
Agreement.
(2) The Advisor agrees that the investment planning and
investment decisions will be in accordance with general investment
policies of the Portfolios as disclosed to the Advisor from time to
time by the Portfolios and as set forth in their prospectuses and
registration statements filed with the United States Securities and
Exchange Commission (the "SEC").
(3) The Advisor agrees that it will maintain all required
records, memoranda, instructions or authorizations relating to the
acquisition or disposition of securities for the Portfolios.
(4) The Trust agrees that it will furnish to the Advisor any
information that the latter may reasonably request with respect to
the services performed or to be performed by the Advisor under this
Agreement.
(5) The Advisor is authorized to select the brokers or
dealers that will execute the purchases and sales of portfolio
securities for the Portfolios and is directed to use its best
efforts to obtain the best available price and most favorable
execution, except as prescribed herein. Subject to prior
authorization by the Board of appropriate policies and procedures,
and subject to termination at any time by the Board, the Advisor
may also be authorized to effect individual securities transactions
at commission rates in excess of the minimum commission rates
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available, to the extent authorized by law, if the Advisor
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 the Advisor's overall
responsibilities with respect to the Portfolios and other funds for
which it acts as investment advisor.
(6) It is understood and agreed that in furnishing the
Portfolios with the services as herein provided, neither the
Advisor nor any officer, director or agent thereof shall be held
liable to the Trust, a Portfolio or its creditors or unitholders
for errors of judgment or for anything except willful misfeasance,
bad faith, or gross negligence in the performance of its duties, or
reckless disregard of its obligations and duties under the terms of
this Agreement. It is further understood and agreed that the
Advisor may rely upon information furnished to it reasonably
believed to be accurate and reliable.
Part Two: COMPENSATION TO INVESTMENT MANAGER
(1) The Trust agrees to pay to the Advisor, and the Advisor
covenants and agrees to accept from each Portfolio in full payment
for the services furnished, a fee for each calendar day of each
year equal to the total of 1/365th (1/366th in each leap year) of
the amount computed as shown below. The computation shall be made
for each day on the basis of net assets as of the close of business
of the full business day two (2) business days prior to the day for
which the computation is being made. In the case of the suspension
of the computation of net asset value, the asset charge for each
day during such suspension shall be computed as of the close of
business on the last full business day on which the net assets were
computed. Net assets as of the close of a full business day shall
include all transactions in shares of the Portfolio recorded on the
books of the Portfolio for that day.
The asset charge shall be based on the net assets of each
Portfolio as set forth in the following table.
Emerging Markets Portfolio World Technologies Portfolio
Assets Annual rate at Assets Annual rate at
(billions) each asset level (billions) each asset level
First $0.25 1.10% First $0.25 0.720%
Next 0.25 1.08% Next 0.25 0.695
Next 0.25 1.06% Next 0.25 0.670
Next 0.25 1.04% Next 0.25 0.645
Next 1.00 1.02% Next 1.0 0.620
Over 2.00 1.00% Over 2.00 0.595
(2) The fee shall be paid on a monthly basis and, in the
event of the termination of this Agreement, the fee accrued shall
be prorated on the basis of the number of days that this Agreement
is in effect during the month with respect to which such payment is
made.
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(3) The fee provided for hereunder shall be paid in cash by
the Portfolios to the Advisor within five business days after the
last day of each month.
Part Three: ALLOCATION OF EXPENSES
(1) The Trust agrees to pay:
(a) Fees payable to the Advisor for its services under the
terms of this Agreement.
(b) Taxes.
(c) Brokerage commissions and charges in connection with the
purchase and sale of assets.
(d) Custodian fees and charges.
(e) Fees and charges of its independent certified public
accountants for services the Trust or Portfolios request.
(f) Premium on the bond required by Rule 17g-1 under the
Investment Company Act of 1940.
(g) Fees and expenses of attorneys (i) it employs in matters
not involving the assertion of a claim by a third party against the
Trust, its trustees and officers, (ii) it employs in conjunction
with a claim asserted by the Board against the Advisor except that
the Advisor shall reimburse the Trust for such fees and expenses if
it is ultimately determined by a court of competent jurisdiction,
or the Advisor agrees, that it is liable in whole or in part to the
Trust, and (iii) it employs to assert a claim against a third
party.
(h) Fees paid for the qualification and registration for
public sale of the securities of the Portfolios under the laws of
the United States and of the several states in which such
securities shall be offered for sale.
(i) Fees of consultants employed by the Trust or Portfolios.
(j) Trustees, officers and employees expenses which shall
include fees, salaries, memberships, dues, travel, seminars,
pension, profit sharing, and all other benefits paid to or provided
for trustees, officers and employees, trustees and officers
liability insurance, errors and omissions liability insurance,
worker's compensation insurance and other expenses applicable to
the trustees, officers and employees, except the Trust will not pay
any fees or expenses of any person who is an officer or employee of
the Advisor or its affiliates.
(k) Filing fees and charges incurred by the Trust in
connection with filing any amendment to its Declaration of Trust,
or incurred in filing any other document with the State of
Massachusetts or its political subdivisions.
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(l) Organizational expenses of the Trust.
(m) Expenses incurred in connection with lending portfolio
securities of the Portfolios.
(n) Expenses properly payable by the Trust or Portfolios,
approved by the Board.
(2) The Advisor agrees to pay all expenses associated with
the services it provides under the terms of this Agreement.
Part Four: MISCELLANEOUS
(1) The Advisor shall be deemed to be an independent
contractor and, except as expressly provided or authorized in this
Agreement, shall have no authority to act for or represent the
Trust or Portfolios.
(2) A "full business day" shall be as defined in the By-laws.
(3) The Trust and each Portfolio recognize that the Advisor
now renders and may continue to render investment advice and other
services to other investment companies and persons which may or may
not have investment policies and investments similar to those of
the Portfolios and that the Advisor manages its own investments
and/or those of its subsidiaries. The Advisor shall be free to
render such investment advice and other services and the Trust and
each Portfolio hereby consent thereto.
(4) Neither this Agreement nor any transaction made pursuant
hereto shall be invalidated or in any way affected by the fact that
trustees, officers, agents and/or unitholders of the Trust are or
may be interested in the Advisor or any successor or assignee
thereof, as directors, officers, stockholders or otherwise; that
directors, officers, stockholders or agents of the Advisor are or
may be interested in the Trust or Portfolios as trustees, officers,
unitholders, or otherwise; or that the Advisor or any successor or
assignee, is or may be interested in the Portfolios as unitholder
or otherwise, provided, however, that neither the Advisor nor any
officer, trustee or employee thereof or of the Trust, shall sell to
or buy from the Portfolios any property or security other than
units issued by the Portfolios, except in accordance with
applicable regulations or orders of the SEC.
(5) Any notice under this Agreement shall be given in
writing, addressed, and delivered, or mailed postpaid, to the party
to this Agreement entitled to receive such, at such party's
principal place of business in Minneapolis, Minnesota, or to such
other address as either party may designate in writing mailed to
the other.
(6) The Advisor agrees that no officer, director or employee
of the Advisor will deal for or on behalf of the Trust or
Portfolios with himself as principal or agent, or with any
corporation or partnership in which he may have a financial
interest, except that this shall not prohibit:
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(a) Officers, directors or employees of the Advisor from
having a financial interest in the Portfolios or in the Advisor.
(b) The purchase of securities for the Portfolios, or the
sale of securities owned by the Portfolios, through a security
broker or dealer, one or more of whose partners, officers,
directors or employees is an officer, director or employee of the
Advisor provided such transactions are handled in the capacity of
broker only and provided commissions charged do not exceed
customary brokerage charges for such services.
(c) Transactions with the Portfolios by a broker-dealer
affiliate of the Advisor as may be allowed by rule or order of the
SEC, and if made pursuant to procedures adopted by the Board.
(7) The Advisor agrees that, except as herein otherwise
expressly provided or as may be permitted consistent with the use
of a broker-dealer affiliate of the Advisor under applicable
provisions of the federal securities laws, neither it nor any of
its officers, directors or employees shall at any time during the
period of this Agreement, make, accept or receive, directly or
indirectly, any fees, profits or emoluments of any character in
connection with the purchase or sale of securities (except shares
issued by the Portfolios) or other assets by or for the Trust or
Portfolios.
Part Five: RENEWAL AND TERMINATION
(1) This Agreement shall continue in effect for each
Portfolio until Nov. 12, 1998, or until a new agreement is approved
by a vote of the majority of the outstanding units of each
Portfolio and by vote of the Trust's Board, including the vote
required by (b) of this paragraph, and if no new agreement is so
approved, this Agreement shall continue from year to year
thereafter unless and until terminated by either party as
hereinafter provided, except that such continuance shall be
specifically approved at least annually (a) by the Board or by a
vote of the majority of the outstanding units of the relevant
Portfolios and (b) by the vote of a majority of the trustees 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. As used in this paragraph, the term "interested
person" shall have the same meaning as set forth in the Investment
Company Act of 1940, as amended (the "1940 Act").
(2) This Agreement may be terminated by either the Trust on
behalf of a Portfolio or the Advisor at any time by giving the
other party 60 days' written notice of such intention to terminate,
provided that any termination shall be made without the payment of
any penalty, and provided further that termination may be effected
either by the Board or by a vote of the majority of the outstanding
voting units of the Portfolio. The vote of the majority of the
outstanding voting units of a Portfolio for the purpose of this
Part Five shall be the vote at a unitholders' regular meeting, or a
special meeting duly called for the purpose, of 67% or more of the
Portfolio's shares present at such meeting if the holders of more
than 50% of the outstanding voting units are present or represented
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by proxy, or more than 50% of the outstanding voting units of the
Portfolio, whichever is less.
(3) This Agreement shall terminate in the event of its
assignment, the term "assignment" for this purpose having the same
meaning as set forth in the 1940 Act.
IN WITNESS THEREOF, the parties hereto have executed the
foregoing Agreement as of the day and year first above written.
WORLD TRUST
Emerging Markets Portfolio
World Technologies Portfolio
By
Xxxxxx X. Xxx
Vice President
AMERICAN EXPRESS FINANCIAL CORPORATION
By
Xxxxxxx X. Xxxxx
Vice President
