INVESTMENT ADVISORY AGREEMENT
XXXXX & STEERS UTILITY FUND, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
March ___, 2004
XXXXX & STEERS CAPITAL MANAGEMENT, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We, the undersigned Xxxxx & Steers Utility Fund, Inc., herewith confirm
our agreement with you as follows:
1. We are an open-end, non-diversified management investment company
registered under the Investment Company Act of 1940 (the "Act"). We are
currently authorized to issue separate classes of shares and our Directors are
authorized to reclassify and issue any unissued shares to any number of
additional classes or series (portfolios) each having its own investment
objective, policies and restrictions, all as more fully described in the
prospectus and the statement of additional information constituting parts of the
Registration Statement filed on our behalf under the Securities Act of 1933 and
the Act. We propose to engage in the business of investing and reinvesting our
assets in securities of the type and in accordance with the limitations
specified in our Articles of Incorporation, By-Laws, Registration Statement
filed and affecting our portfolio and on your own initiative will furnish us
from time to time with such information as you may believe appropriate for this
purpose, whether concerning the individual issuers whose securities are included
in our portfolio, the industries in which they engage, or the conditions
prevailing in the economy generally. You will also furnish us with such
statistical and analytical information with respect to our portfolio securities
as you may believe appropriate or as we reasonably may request. In making such
purchases and sales of our portfolio securities, you will bear in mind the
policies set from time to time by our Board of Directors as well as the
limitations imposed by our
Articles of Incorporation and in our Registration Statement under the Act and
the Securities Act of 1933, the limitations in the Act and of the Internal
Revenue Code of 1986, as amended, in respect of regulated investment companies.
2. It is understood that you will from time to time employ or associate
with yourselves such persons as you believe to be particularly fitted to assist
you in the execution of your duties hereunder, the cost of performance of such
duties to be borne and paid by you. No obligation may be incurred on our behalf
in any such respect. During the continuance of this agreement at our request you
will provide us persons satisfactory to our Board of Directors to serve as our
officers.
3. We hereby confirm that we shall be responsible and hereby assume the
obligation for payment of all our expenses, including: (a) payment of the fee
payable to you under paragraph 5 hereof; (b) charges and expenses of our
administrator, sub-administrator, custodian, transfer, and dividend disbursing
agent; (c) fees of directors who are not your affiliated persons; (d) legal and
auditing expenses; (e) compensation of our officers, Directors and employees who
do not devote any part of their time to your affairs or the affairs of your
affiliates other than us; (f) costs of printing our prospectuses and stockholder
reports; (g) costs of proxy solicitation; (h) cost of maintenance of corporate
existence; (i) interest charges, taxes, brokerage fees and commissions; (j)
costs of stationery and supplies; (k) expenses and fees related to registration
and filing with the Securities and Exchange commission and with state regulatory
authorities; and (1) upon the approval of the Board of Directors, costs of your
personnel or your affiliates rendering clerical, accounting and other office
services.
4. We shall expect of you, and you will give us the benefit of, your
best judgment and efforts in rendering these services to us, and we agree as an
inducement to your undertaking these services that you shall not be liable
hereunder for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, you against any liability to us or to our security holders
to which you would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties hereunder.
5. In consideration of the foregoing, we will pay you a monthly fee at
an annualized rate of .75 of 1 % of our average daily nets assets up to $1.5
billion, plus .65 of 1 % of such assets in excess of $1.5 billion. Such fee
shall be payable in arrears on the last day of each calendar month for services
performed hereunder during such month. If our initial Registration Statement is
declared effective by the Securities and Exchange Commission after the beginning
of a month or this agreement terminates prior to the end of a month, such fee
shall be prorated according to the proportion which such portion of the month
bears to the full month.
6. This agreement shall become effective on the date on which our
pending Registration Statement on Form N-lA relating to our shares becomes
effective and shall remain in effect until the first meeting of our shareholders
held after such date and, if approved by the vote of a majority of the
outstanding voting securities, as defined in the Act, at such meeting, continue
in effect until December 31, 2006 and may be continued for successive
twelve-month periods (computed from each January 1) with respect to each
portfolio provided that such continuance is specifically approved at least
annually by the Board of Directors or by majority vote of the holders of the
outstanding voting securities of such portfolio (as defined in the Act), and, in
either case, by
a majority of the Board of Directors who are not interested persons as defined
in the Act, of any party to this agreement (other than as Directors of our
corporation), provided further, however, that if the continuation of this
agreement is not approved, you may continue to render the services described
herein in the manner to the extent permitted by the Act and the rules and
regulations thereunder. Upon the effectiveness of this agreement, it shall
supersede all previous agreements between us covering the subject matter hereof.
This agreement may be terminated at any time, without the payment of any
penalty, by vote of a majority of the outstanding voting securities (as so
defined) or by a vote of a majority of the Board of Directors on 60 days'
written notice to you, or by you on 60 days' written notice to us.
7. This agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by you and this agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and any
interpretation thereof contained in rules or regulations promulgated by the
Securities and Exchange Commission thereunder.
8. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your officers, directors or employees, who may also be a
Director, officer or employee of ours, or persons otherwise affiliated with us
(within the meaning of the Act) to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other trust, corporation, firm, individual or association.
9. If you cease to act as our investment adviser, or, in any event, if
you so request in writing, we agree to take all necessary action to change our
name to a name not including the term "Xxxxx & Steers". You may from time to
time make available without charge to us for our use such marks or symbols owned
by you, including marks or symbols containing the term "Xxxxx & Steers" or any
variation thereof, as you may consider appropriate. Any such marks or symbols so
made available will remain your property and you shall have the right, upon
notice in writing, to require us to cease the use of such xxxx or symbol at any
time.
10. This agreement shall be construed in accordance with the laws of
the State of New York, provided, however, that nothing herein shall be construed
as being inconsistent with the Act.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
XXXXX & STEERS UTILITY FUND, INC.
By: _______________________________
Name: Xxxxxx X. Xxxxxx
Title: Chairman
Agreed to and accepted
as of the date first set
forth above
XXXXX & STEERS CAPITAL MANAGEMENT, INC.
By: __________________________
Name: Xxxxxx Xxxxx
Title: President
