EX-99.B5.(D)
INVESTMENT ADVISORY CONTRACT FOR
THE TOCQUEVILLE SMALL CAP VALUE FUND
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 10th day of June, 1994 by and between THE
TOCQUEVILLE TRUST, a Massachusetts business trust (the "Trust"), on behalf of
its series THE TOCQUEVILLE SMALL CAP VALUE FUND (the "Fund") and TOCQUEVILLE
ASSET MANAGEMENT L.P., a limited partnership (the "Investment Adviser");
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations
promulgated thereunder; and
WHEREAS, the Investment Adviser is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Investment
Advisers Act"), and engages in the business of acting as an investment adviser;
and
WHEREAS, the Trust and the Investment Adviser desire to enter
into an agreement to provide for the management of the assets of the Fund on the
terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
receipt whereof is hereby acknowledged, the parties hereto agree
as follows:
1. Management. The Investment Adviser shall act as investment
adviser for the Trust and shall, in such capacity, supervise the investment and
reinvestment of the cash, securities or other properties comprising the Trust's
assets, subject at all times to the policies and control of the Trust's Board of
Trustees. The Investment Adviser shall give the Trust the benefit of its best
judgment, efforts and facilities in rendering its services as investment
adviser. The Investment Adviser shall, for all purposes herein, be deemed an
independent contractor and shall have, unless otherwise expressly provided or
authorized, no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
2. Duties of Investment Advisor. In carrying out its
obligation under paragraph 1 hereof, the Investment Adviser
shall:
(a) supervise and manage all aspects of the
Fund's operations;
(b) provide the Fund or obtain for it, and
thereafter supervise, such executive, administrative, clerical and shareholder
servicing services as are deemed advisable by the Trust's Board of Trustees;
(c) arrange, but not pay for, the periodic
updating of prospectuses and supplements thereto, proxy material,
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tax returns, reports to the Fund's shareholders and reports to and filings with
the Securities and Exchange Commission, state Blue Sky authorities;
(d) provide the Fund with, or obtain for it,
adequate office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items for
the Fund's principal office;
(e) provide the Board of Trustees of the Trust on
a regular basis with financial reports and analyses on the Fund's
operations and the operations of comparable investment companies;
(f) obtain and evaluate pertinent information
about significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally or the
Fund, and whether concerning the individual issuers whose securities are
included in the Fund or the activities in which they engage, or with respect to
securities which the Investment Adviser considers desirable for inclusion in the
Fund;
(g) determine what issuers and securities shall
be represented in the Fund's portfolio and regularly report them
to the Board of Trustees of the Trust;
(h) formulate and implement continuing programs
for the purchases and sales of the securities of such issuers and
regularly report thereon to the Board of Trustees of the Trust;
and
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(i) take, on behalf of the Fund, all actions
which appear to the Fund necessary to carry into effect such purchase and sale
programs and supervisory functions as aforesaid, including the placing of orders
for the purchase and sale of portfolio securities.
3. Broker-Dealer Relationships. The Investment Adviser is
responsible for decisions to buy and sell securities for the Fund, broker-dealer
selection, and negotiation of brokerage commission rates. The Investment
Adviser's primary consideration in effecting a security transaction will be
execution at a price that is reasonable and fair compared to the commission, fee
or other remuneration received or to be received by other brokers in connection
with comparable transactions, including similar securities being purchased or
sold on a securities exchange during a comparable period of time.
In selecting a broker-dealer to execute each particular
transaction, the Investment Adviser will take the following into consideration:
the best net price available; the reliability, integrity and financial condition
of the broker-dealer; the size of and difficulty in executing the order; and the
value of the expected contribution of the broker-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-dealer if the difference is reasonably justified by other aspects of the
portfolio execution
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services offered. Subject to such policies and procedures as the Board of
Trustees may determine, the Investment Adviser 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 the Investment Adviser for the
Fund's use 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 the Investment Adviser
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
Investment Adviser's overall responsibilities with respect to the Fund. The
Investment Adviser is further authorized to allocate the orders placed by it on
behalf of the Fund to such brokers and dealers who also provide research or
statistical material, or other services to the Fund or the Investment Adviser
for the Fund's use. Such allocation shall be in such amounts and proportions as
the Investment Adviser shall determine and the Investment Adviser will report on
said allocations regularly to the Board of Trustees of the Trust indicating the
brokers to whom such allocations have been made and the basis therefor.
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4. Control by Board of Trustees. Any investment program
undertaken by the Investment Adviser pursuant to this Agreement, as well as any
other activities undertaken by the Investment Adviser on behalf of the Fund
pursuant thereto, shall at all times be subject to any directives of the Board
of Trustees of the Trust.
5. Compliance with Applicable Requirements. In
carrying out its obligations under this Agreement, the Investment
Adviser shall at all times conform to:
(a) all applicable provisions of the Investment
Company Act and the Investment Advisers Act and any rules and
regulations adopted thereunder as amended; and
(b) the provisions of the Registration Statements
of the Fund under the Securities Act of 1933, as amended, and the
Investment Company Act; and
(c) the provisions of the Declaration of Trust of
the Trust, as amended; and
(d) the provisions of the By-laws of the Trust,
as amended; and
(e) any other applicable provisions of state and
federal law.
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6. Expenses. The expenses connected with the Fund
shall be allocable between the Fund and the Investment Adviser as
follows:
(a) The Investment Adviser shall furnish, at its
expense and without cost to the Trust, the services of a President, Secretary
and one or more Vice Presidents of the Fund, to the extent that such additional
officers may be required by the Fund for the proper conduct of its affairs.
(b) The Investment Adviser shall further
maintain, at its expense and without cost to the Fund, a trading function in
order to carry out its obligations under subparagraph (i) of paragraph 2 hereof
to place orders for the purchase and sale of portfolio securities for the Fund.
(c) Nothing in subparagraph (a) hereof shall be
construed to require the Investment Adviser to bear:
(i) any of the costs (including applicable office
space, facilities and equipment) of the services of a
principal financial officer of the Fund whose normal duties
consist of maintaining the financial accounts and books and
records of the Fund; including the reviewing of calculations
of net asset value and preparing tax returns; or
(ii) any of the costs (including applicable office
space, facilities and equipment) of the services of any
of the personnel operating under the direction of such
principal financial officer. Notwithstanding the
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obligation of the Fund to bear the expense of the functions
referred to in clauses (i) and (ii) of this subparagraph (c),
the Investment Adviser may pay the salaries, including any
applicable employment or payroll taxes and other salary costs,
of the principal financial officer and other personnel
carrying out such functions and the Fund shall reimburse the
Investment Adviser therefor upon proper accounting.
(d) All of the ordinary business expenses
incurred in the operations of the Fund and the offering of its shares shall be
borne by the Fund unless specifically provided otherwise in this paragraph 6.
These expenses include but are not limited to brokerage commissions, legal,
auditing, taxes or governmental fees, the cost of preparing share certificates,
custodian, depository, transfer and shareholder service agent costs, expenses of
issue, sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, insurance premiums on property or personnel
(including officers and trustees if available) of the Fund which inure to its
benefit, expenses relating to trustee and shareholder meetings, the cost of
preparing and distributing reports and notices to shareholders, the fees and
other expenses incurred by the Fund in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to shareholders.
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7. Delegation of Responsibilities. The Investment Adviser may
delegate the performance of certain investment advisory services to Tocqueville
Finance S.A., a company registered as an investment adviser in France, including
the responsibility to provide certain information and research to the Investment
Adviser regarding the foreign securities in which the Fund may invest.
Tocqueville Finance may place portfolio trades in foreign securities for the
Fund which, in accordance with the general securities practices in France, will
result in Tocqueville Finance receiving a portion of the brokerage commissions
paid to certain securities brokers for the foreign securities bought and sold
for the Fund.
The authorization for the Investment Adviser to use the
services of Tocqueville Finance is subject to the Fund receiving best price and
execution for the foreign securities transactions placed with foreign securities
brokers by Tocqueville Finance. Tocqueville Finance is an affiliate of the
Investment Adviser by virtue of the Investment Adviser's ownership of
approximately 25% of the common stock of such corporation. No compensation may
be paid the Fund or the Investment Adviser for the information and research
provided by Tocqueville Finance; however, Tocqueville Finance will, as stated
above, retain the portion of brokerage commissions received from certain
securities brokers for transactions executed in foreign markets.
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8. Compensation. The Fund shall pay the Investment Adviser in
full compensation for services rendered hereunder an annual investment advisory
fee, payable monthly, of .75% of the Fund's average daily net assets on the
first $100 million, .70% of the Fund's average daily net assets in excess of
$100 million but not exceeding $500 million, and .65% of the Fund's average
daily net assets in excess of $500 million. The average daily net asset value of
the Fund shall be determined in the manner set forth in the Declaration of Trust
and Prospectus of the Fund.
9. Expense Limitation. If, for any fiscal year, the total of
all ordinary business expenses of the Fund, including all investment advisory
fees but excluding brokerage commissions and fees, taxes, interest and
extraordinary expenses such as litigation, would exceed the most restrictive
expense limits imposed by any statute or regulatory authority of any
jurisdiction in which shares of the Fund are offered for sale, the investment
advisory fee shall be reduced by the amount of such excess. The amount of any
such reduction to be borne by the Investment Adviser shall be deducted from the
monthly investment advisory fee otherwise payable to the Investment Adviser
during such fiscal year; and if such amount should exceed such monthly fee, the
Investment Adviser agrees to pay to the Fund such excess expenses no later than
the last day of the first month of the next succeeding fiscal year. For the
purposes of this paragraph, the term "fiscal year" shall exclude the portion of
the current
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fiscal year which shall have elapsed prior to the date hereof and shall include
the portion of the then-current fiscal year which shall have elapsed at the date
of termination of this Agreement.
10. Non-Exclusivity. The services of the Investment Adviser to
the Fund are not to be deemed to be exclusive, and the Investment Adviser shall
be free to render investment advisory and corporate administrative or other
services to others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers or Partners of the
Investment Adviser may serve as officers or trustees of the Trust, and that
officers or trustees of the Trust may serve as officers or partners of the
Investment Adviser to the extent permitted by law; and that the officers and
partners of the Investment Adviser are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers or partners of any other firm or corporation,
including other investment companies.
11. Term and Approval. This Agreement shall become effective
at the close of business on the date hereof and shall remain in force and effect
for two years and thereafter from year to year, provided that such continuance
is specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or
(ii) by the vote of a majority of the Fund's outstanding voting
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securities (as defined in Section 2(a)(42) of the Investment
Company Act); and
(b) by the affirmative vote of a majority of the
Trustees who are not parties to this Agreement or interested persons of a party
to this Agreement (other than as Trust trustees), by votes cast in person at a
meeting specifically called for such purpose.
12. Termination. This Agreement may be terminated at any time,
without the payment of any penalty, by vote of the Trust's Board of Trustees or
by vote of a majority of the Fund's outstanding voting securities, or by the
Investment Adviser, on sixty (60) days' written notice to the other party. The
notice provided for herein may be waived by either party. This Agreement shall
automatically terminate in the event of its assignment, the term "assignment"
for the purpose having the meaning defined in Section 2(a)(4) of the Investment
Company Act.
13. Liability of Investment Adviser and Indemnification. In
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Investment
Adviser or any of its officers, trustees or employees, it shall not be subject
to liability to the Trust or to any shareholder of the Trust for any omission in
the course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
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14. Liability of Trustees and Shareholders. A copy of the
Agreement and Declaration of Trust of the Trust is on file with the Secretary of
The Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the trustees of the Trust as trustees and
not individually and that the obligations of this instrument are not binding
upon any of the trustees or shareholders individually but are binding only upon
the assets and property of the Fund.
15. 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.
Until further notice to the other party, it is agreed that the address of the
Trust and that of the Investment Adviser shall be 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
16. 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 Investment Company Act
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 Investment Company Act
reflected in any provision of this
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Agreement is released by rules, regulation or order of the Securities and
Exchange Commission, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in duplicate by their respective officers on the day
and year first above written.
THE TOCQUEVILLE TRUST, on
behalf of The Tocqueville
Small Cap Value Fund
Attest: By:/s/ Xxxxxx Xxxxxxxxxxxx
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/s/ Xxxxxx Xxxxx
TOCQUEVILLE ASSET MANAGEMENT
L.P.
Attest:
By:/s/ Xxxxxx Xxxxxxxxxxxx
/s/ Xxxxxx Xxxxx -----------------------
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