Exhibit 6(a)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 14th day of June, 1993, by and between CORPORATE HIGH
YIELD FUND, INC., a Maryland corporation (the "Fund"), and FUND ASSET
MANAGEMENT, INC., a Delaware corporation (the "Investment Adviser").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as a closed-end management
investment company registered under the Investment Company Act of 1940, as
amended (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, as amended; 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
Duties of the Investment Adviser
The Fund hereby employs the Investment Adviser to act as a manager of and
investment adviser to the Fund and to furnish, or arrange for its 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 for all purposes herein
shall be deemed to be independent contractors and, unless otherwise expressly
provided or authorized, shall have no authority to act for or represent the
Fund in any way or otherwise be deemed agents of the Fund.
(a) Management and Administrative Services. The Investment Adviser shall
perform (or arrange for the performance by its 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, from time to time shall
determine to be necessary or useful to perform its obligations under this
Agreement. The Investment Adviser also, on behalf of the Fund, shall conduct
relations with custodians, depositories, transfer agents, pricing agents,
dividend disbursing agents, other shareholder servicing 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 generally shall monitor the Funds
compliance with investment policies and restrictions as set forth in filings
made by the Fund 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.
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(b) Investment Advisory services. The Investment Adviser shall provide
(or arrange for its affiliates to provide) the Fund with such investment
research, advice and supervision as the latter from time to time may 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 objective, 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 foreign currency matters. 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 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, on behalf of the Fund, take 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 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
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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
Allocation of Charges and Expenses
(a) The Investment Adviser. The Investment Adviser shall provide the
staff and personnel necessary to perform its obligations under this Agreement,
shall assume and pay or cause to be paid all expenses incurred in connection
with the maintenance of such staff and personnel, and, at its own expense,
shall 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 and 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 daily
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calculation of the net 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 incurred in providing
accounting services to the Fund.
ARTICLE III
Compensation, of the Investment Adviser
(a) Investment Advisory Fee. For the services rendered, the facilities
furnished and the 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 0.5 of 1.0% (0.50%) of the average weekly net assets of the Fund plus the
proceeds of any outstanding borrowings used for leverage ("average weekly net
assets" means the average weekly value of the total assets of the Fund, minus
the sum of (i) accrued liabilities of the Fund, (ii) any accrued and unpaid
interest on outstanding borrowings and (iii) accumulated dividends on shares
of outstanding preferred stock), commencing on the day following effectiveness
hereof. For purposes of this calculation, average weekly net assets are
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
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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 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 for this purpose shall 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, that to
the extent permitted by law, there shall be excluded from such expenses the
amount of any interest, taxes, brokerage fees and commissions and
extraordinary expenses (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 expense limitations be applicable as at the end of the last business
day of the month, that expense
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limitation which results in the largest reduction in the Investment Adviser's
fee shall be applicable.
ARTICLE IV
Limitation of Liability of the Investment Adviser
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 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
Activities of the Investment Adviser
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 this Article
V referred to as "affiliates") are free to render services to others. It is
understood that 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 shareholders or otherwise.
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ARTICLE VI
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above written
and shall remain in force until May 31, 1995 and thereafter, but only so long
as such continuance specifically is 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.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Directors or by the 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 automatically
shall terminate in the event of its assignment.
ARTICLE VII
Amendments of this Agreement
This Agreement may be amended by the parties only if such amendment
specifically is 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
Definitions of Certain Terms
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 and the Rules and Regulations
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thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
ARTICLE IX
Governing Law
This Agreement shall be construed in accordance with the 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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
CORPORATE HIGH YIELD FUND, INC.
By:
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Authorized Signatory
FUND ASSET MANAGEMENT, INC.
By:
----------------------------
Authorized Signatory
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