Exhibit 99.2G(2)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of September, 2006, by and between NOMURA
ASSET MANAGEMENT U.S.A. INC., a New York corporation (hereinafter referred to as
the "Manager"), and NOMURA ASSET MANAGEMENT CO., LTD., a Japanese corporation
(hereinafter referred to as the "Investment Adviser").
W I T N E S S E T H :
WHEREAS, Korea Equity Fund, Inc. (the "Fund") is engaged in business as
a non-diversified, closed-end, management investment company registered under
the Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act"); and
WHEREAS, the Manager and the Investment Adviser are engaged in business
as registered investment advisers under the Investment Advisers Act of 1940, as
amended; and
WHEREAS, the Manager has entered into a Management Agreement with the
Fund of even date herewith (the "Management Agreement"); and
WHEREAS, the Investment Adviser is willing to provide investment
advisory services to the Manager in connection with the Fund's operations on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
ARTICLE I
DUTIES OF THE INVESTMENT ADVISER
The Manager hereby retains the Investment Adviser to act as the
investment adviser of the Fund and to furnish the Fund with the 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. In addition, the Manager may
delegate to the Investment Adviser investment discretion over all or a portion
of the Fund's assets. 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.
(a) Research Services. Subject to the broad supervision of the Manager
and the Fund, the Investment Adviser shall provide the Manager with such
economic research and securities analysis as the latter may from time to time
consider necessary for the proper supervision of the Fund's assets.
(b) Investment Discretionary Services. To the extent that the Manager,
with the prior authorization of the Fund's Board of Directors, delegates
investment discretion in writing to the Investment Adviser, the Investment
Adviser shall provide the Fund with such investment advice and supervision as
the Fund may from time to time consider necessary for the proper supervision of
those assets of the Fund for which the Investment Adviser has been delegated
investment discretion. The Investment Adviser shall furnish continuously an
investment program for such assets of the Fund and shall determine from time to
time which securities shall be purchased, sold or exchanged and what portion of
such assets of the Fund shall be held in the various securities in which the
Fund invests, options, futures, options on futures or in 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 Federal securities laws. The Investment Adviser shall make decisions for
the Fund as to foreign currency matters and make determinations as to foreign
exchange contracts. The Investment Adviser shall make recommendations as to the
manner in which voting rights, rights to consent to corporate action and any
other rights pertaining to such portfolio securities shall be exercised. Should
the Board of Directors of the Fund 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.
To the extent that the Manager delegates such authority in writing to
the Investment Adviser, the Investment Adviser shall 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 the selection of such brokers and dealers and the placing of
such orders, the Investment Adviser is directed at all times to seek to obtain
execution and price within the policy guidelines determined by the Board of
Directors of the Fund and set forth in the filings made by the Fund under
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
The Investment Adviser shall furnish, at its own expense, all
administrative services, office space, equipment and facilities, investment
advisory, statistical and research services, and executive, supervisory and
clerical personnel necessary to carry out its obligations under this Agreement.
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ARTICLE III
COMPENSATION OF THE INVESTMENT ADVISER
For the services to be rendered as provided herein, the Manager shall
pay to the Investment Adviser at the end of each calendar month a fee at the
annual rate of 0.495% of the Fund's average weekly net assets (i.e., the average
weekly value of the total assets of the Fund minus the sum of accrued
liabilities of the Fund), commencing on the day following effectiveness hereof.
To the extent that the Manager, with the prior authorization of the Fund's Board
of Directors, delegates investment discretion over a portion or all of the
Fund's assets to the Investment Adviser and/or Nomura Asset Management Singapore
Limited, it is understood that a portion of such compensation is being paid by
the Manager to the Investment Adviser as agent for the Investment Sub-advisers
referenced in Article IV hereof, and that the Investment Adviser will remit such
compensation to the Investment Sub-advisers pursuant to the Investment
Sub-Advisory Agreements referenced in such Article IV.
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 the prior
week. 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 that this Agreement is in effect shall be prorated in a manner
consistent with the calculation of the fee as set forth above. During any period
when the determination of net asset value is suspended by the Board of Directors
of the Fund, 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.
ARTICLE IV
INVESTMENT SUB-ADVISORY AGREEMENTS
This Agreement is entered into with the understanding that the
Investment Adviser will enter into Investment Sub-Advisory Agreements with each
of Nomura Asset Management Singapore Limited and Nomura Asset Management Hong
Kong Limited, substantially in the forms attached hereto as Exhibits I and II,
respectively, in which the Investment Adviser will contract for advisory
services and pay the Investment Sub-adviser compensation for its services out of
the compensation received hereunder pursuant to Article III.
ARTICLE V
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 execution and 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 V, the term "Investment Adviser" shall include any affiliates
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of the Investment Adviser performing services for the Fund contemplated hereby
and directors, officers, partners and employees of the Investment Adviser as
well as that corporation itself.
ARTICLE VI
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 the purpose of this Article VI
referred to as "affiliates") being free to render services to others. It is
understood that directors, officers, employees and shareholders of the Manager
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 Manager
or the Fund, and that the Investment Adviser is or may become interested in the
Manager or the Fund as shareholder or otherwise.
ARTICLE VII
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date first above
written and shall remain in force until August 31, 2007 and thereafter, but only
so long as the Management Agreement remains in force and provided that 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.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Manager, by the Board of Directors of the Fund, 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 parties. This Agreement shall
automatically terminate in the event of its assignment or upon the termination
of the Management Agreement.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved in accordance with applicable requirements under the
Investment Company Act.
ARTICLE IX
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
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respective meanings specified in the Investment Company Act 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 X
GOVERNING LAW
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.
NOMURA ASSET MANAGEMENT U.S.A. INC.
By_____________________________________
NOMURA ASSET MANAGEMENT CO., LTD.
By_____________________________________
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