EXHIBIT 99.77Q1(e)(1)
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 9th day
of July, 2002 between MERIDIAN INVESTMENT MANAGEMENT CORPORATION, a Colorado
corporation (the "Adviser"), and ICON FUNDS, a Massachusetts business trust (the
"Trust").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company and is
registered under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Adviser is engaged principally in the business of providing
investment management services and is registered under the Investment Advisers
Act of 1940; and
WHEREAS, the Trust is authorized to create separate funds, each with its
own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares of the Trust as shown on the attached
Schedule A (each a "Fund," and collectively the "Funds").
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. INVESTMENT ADVISORY SERVICES. The Adviser, at its own expense, shall
furnish the following services and facilities to the Trust:
(a) Investment Program. The Adviser will (i) furnish continuously an
investment program of each Fund, (ii) determine (subject to the overall
supervision and review of the Board of Trustees of the Trust) what investments
shall be purchased, held sold or exchanged by each Fund and what portion, if
any, of the assets of each Fund shall be held uninvested, and (iii) make changes
on behalf of the Trust in the investments of each Fund.
(b) Office Space and Facilities. The Adviser shall furnish the Trust office
space in the offices of the Adviser, or in such other place or places as may be
agreed upon from time to time, and all necessary office facilities, simple
business equipment, supplies, utilities, and telephone service for managing the
investments of the Trust. These services are exclusive of the necessary services
and records of any dividend disbursing agent, transfer agent, registrar or
custodian, and accounting and bookkeeping services to provided by the Trust's
transfer agent, record keeping service or custodian.
(c) Distribution Expenses. Except as may be provided in distribution
expense plans as contemplated by Rule 12b-1 under the 1940 Act, the Adviser
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shall bear all sales, promotions or distribution expenses in connection with the
distribution of shares of any Fund and shall be the sole judge of the extent to
which sales or promotion expenses shall be incurred; provided, however, that the
Adviser shall not be obligated to pay for any portion of the cost of
prospectuses or periodic reports provided to shareholders. Expenses incurred in
complying with laws regulating the issue or sale of securities shall not be
deemed to be sales, promotion or distribution expenses.
(d) Portfolio Transactions. The Adviser shall place all orders for the
purchase and sale of portfolio securities for the account of each Fund with
brokers or dealers selected by the Adviser, although the Trust will pay the
actual brokerage commissions on portfolio transactions in accordance with
Paragraph 2(c). In executing portfolio transactions and selecting brokers or
dealers, the Adviser will use its best efforts to seek on behalf of the Trust or
any Fund thereof the best overall terms available. In assessing the best overall
terms available for any transaction, the Adviser shall consider all factors it
deems relevant, including the breadth of the market in the security, the price
of the security, the financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any (for the specific
transaction and on a continuing basis). In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a particular
transaction, the Adviser may also consider the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934) provided to any Fund and/or other accounts over which the Adviser or an
affiliate of the Adviser exercises investment discretion. The Adviser is
authorized to pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for any fund which
is in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Adviser determines
in good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of that particular transaction or in terms of all of the accounts over
which investment discretion is so exercised.
2. ALLOCATION OF EXPENSES.
Except for the services and facilities to be provided by the Adviser as set
forth in Paragraph 1 above, the Trust assumes and shall pay all expenses for all
other Trust operations and activities and shall reimburse the Adviser for any
such expenses incurred by the Adviser. The expenses to be borne by the Trust
shall include, without limitation:
(a) The charges and expenses of any registrar, stock transfer or dividend
disbursing agent, custodian, or depository appointed by the Trust for the
safekeeping of its cash, portfolio securities and other property;
(b) The charges and expenses of auditors;
(c) Brokerage commissions for transactions in the portfolio securities of
the Trust;
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(d) All taxes, including issuance and transfer taxes, and corporate fees
payable by the Trust to Federal, state or other governmental agencies;
(e) The cost of stock certificates (if any) representing shares of the
Trust;
(f) Expenses involved in registering and maintaining registrations of the
Trust and of its shares with the Securities and Exchange Commission and various
states and other jurisdictions, including reimbursement of actual expenses
incurred by the Adviser in performing such functions for the Trust, and
including compensation of persons who are Adviser employees in proportion to the
relative time spent on such matters;
(g) All expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, printing and mailing proxy statements,
quarterly reports, semi-annual reports, annual reports and other communications
to shareholders;
(h) All expenses of preparing and setting in type prospectuses, and
expenses of printing and mailing the same to shareholders (but not expenses of
printing and mailing of prospectuses and literature used for promotional
purposes in accordance with Paragraph 1(c) above);
(i) Compensation and travel expenses of Trustees who are not "interested
persons" within the meaning of the 1940 Act;
(j) The expense of furnishing, or causing to be furnished, to each
shareholder a statement of his account, including the expense of mailing;
(k) Charges and expenses of legal counsel and internal audit/compliance
personnel in connection with matters relating to the Trust; including without
limitation, legal services rendered in connection with the Trust's corporate and
financial structure and relations with its shareholders, issuance of Trust
shares, and registration and qualification of securities under Federal, state
and other laws;
(l) The expenses of attendance at professional meetings or organizations
such as the Investment Company Institute, or Commerce Clearing House by officers
and Trustees of the Trust, and the membership or association dues of such
organizations;
(m) The cost and expense of maintaining the books and records of the Trust,
including general ledger accounting;
(n) The expense of obtaining and maintaining a fidelity bond as Section
17(g) of the 1940 Act;
(o) Interest payable on Trust borrowings; and
(p) Postage.
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3. COMPENSATION. The Trust shall pay to the Adviser for its services to
each Fund a monthly fee with respect to each of the Funds as soon as practical
after the last day of each calendar month, which fee shall be paid at the rate
set forth in the attached Schedule A based upon the Monthly Average Net Assets
(as defined below) of such Fund for such calendar month.
In the case of termination of this Agreement with respect to any Fund
during any calendar month, the fee with respect to such Fund for that month
shall be reduced proportionately based upon the number of calendar days during
which it is in effect and the fee shall be computed upon the average net assets
of such Fund for the business days which it is so in effect.
The "Monthly Average Net Assets" of any Fund of the Trust for any calendar
month shall be equal to the quotient produced by dividing (i) the sum of the net
assets of such Fund, determined in accordance with procedures established from
time to time by or under the direction of the Board of Trustees of the Trust in
accordance with the Declaration of Trust of the Trust, as of the close of
business on each day during such month that such Fund was open for business, by
(ii) the number of such days.
4. EXPENSE LIMITATION. The Adviser agrees that for any fiscal year of the
Trust during which the total of all expenses of the Trust (including investment
Advisory fees under this Agreement, but excluding interest, portfolio brokerage
commissions and expenses, taxes and extraordinary items) exceeds the lowest
expense limitation imposed in any state in which the Trust is then making sales
of its shares or in which its shares are then qualified for sale, the Adviser
will reimburse the Trust for such expenses not otherwise excluded from
reimbursement by this Paragraph 4 to the extent that they exceed such expense
limitation.
5. RELATIONS WITH TRUST. Subject to and in accordance with the Declaration
of Trust and Bylaws of the Trust and the Articles of Incorporation and Bylaws of
the Adviser, respectively, it is understood that Trustees, officers, agents and
shareholders of the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, officers or otherwise; that directors,
officers, agents and shareholders of the Adviser are or may be interested in the
Trust as Trustees, officers, shareholders, or otherwise; that the Adviser (or
any such successor) is or may be interested in the Trust as a shareholder or
otherwise; and that the effect of any such adverse interests shall be governed
by said Declaration of Trust, Articles of Incorporation and Bylaws.
6. LIABILITY OF ADVISER AND OFFICERS AND TRUSTEES OF THE TRUST. No
provision of this Agreement shall be deemed to protect the Adviser against any
liability to the Trust or its shareholders to which it might otherwise be
subject by reason of any willful misfeasance, bad faith or gross negligence in
the performance of its duties or the reckless disregard of its obligations and
duties under this Agreement. Nor shall any provision hereof be deemed to protect
any Trustee or officer of the Trust against any such liability to which he might
otherwise be subject by reason of any willful misfeasance, bad faith or gross
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negligence in the performance of his duties or the reckless disregard of his
obligations and duties.
7. TERM OF THIS AGREEMENT.
(a) Term. This Agreement shall continue in effect for an initial term from
September 30, 2002 through September 29, 2004, unless earlier amended or
terminated. This Agreement is renewable thereafter as to each Fund from year to
year only so long as such continuance is specifically approved at least annually
by the vote of a majority of the Trustees of the Trust, including a majority of
those Trustees who are not parties hereto or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, or as to any Fund, by the affirmative
vote of a majority of the outstanding voting securities of the Fund.
(b) Termination. This Agreement may be terminated at any time, without
payment or any penalty, by vote of the Trustees of the Trust or by vote of a
majority of the outstanding shares (as defined in the 1940 Act), or by the
Adviser on sixty (60) days' written notice to the other party.
(c) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment.
8. SERVICES NOT EXCLUSIVE. The services of the Adviser to the Trust
hereunder are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others so long as its services hereunder are not
impaired thereby.
9. LIMITATION OF LIABILITY.
(a) THE TRUST. The term "ICON Funds" means, refers to and includes the
Trustees from time to time serving under the Master Trust Agreement of the Trust
dated September 19, 1996, as the same may subsequently thereto have been, or
subsequently hereto be amended. It is expressly agreed that the obligations of
the Trust hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally, but bind only
the assets and property of the Trust, as provided in the Master Trust Agreement
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees and shareholders of the Trust and signed by an authorized
officer of the Trust, acting as such, and neither such authorization by such
Trustees and shareholders not such execution and delivery by such officer shall
be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the assets and property
of the Trust as provided in the Master Trust Agreement.
(b) THE ADVISER. It is expressly agreed that the obligations of the Adviser
hereunder shall not be binding upon any of the shareholders, nominees, officers,
agents or employees of the Adviser, personally, but bind only the assets and
property of the Adviser, respectively. The execution and delivery of the
Agreement have been authorized by the directors and officers of the Adviser and
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signed by an authorized officer of the Adviser, acting as such, and neither such
authorization by such directors and officers nor such execution and delivery by
such officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the assets
and property of the Adviser, respectively. This limitation of liability shall
not be deemed to protect the shareholders, nominees, officers, agents or
employees of the Adviser against any liability of the Trust or its shareholders
to which they might otherwise be subject by reason of any willful misfeasance,
bad faith or gross negligence in the performance of their duties or the reckless
disregard of their obligations and duties under this Agreement.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Agreement as of the date and year first above written.
ICON FUNDS MERIDIAN INVESTMENT MANAGEMENT CORPORATION
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxxx
Title: Vice President and Secretary Title: President
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SCHEDULE A
FUND MONTHLY FEE SCHEDULE
ICON Bond Fund 1/12 of 0.60%
ICON Covered Call Fund 1/12 of 0.75%
ICON Equity Income Fund 1/12 of 0.75%
ICON Long/Short Fund 1/12 of 0.85%
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