1
Exhibit 99d.1
-------------
INVESTMENT ADVISORY AGREEMENT
BETWEEN
INTERNATIONAL CURRENCY FUND
AND
STATE STREET BANK AND TRUST COMPANY
This Agreement is made as of this 22nd day of September, 1998, between
International Currency Fund, a Delaware business trust (the "Investment
Company"), and State Street Bank and Trust Company, a Massachusetts trust
company (the "Adviser").
WHEREAS, the Investment Company is an open-end, diversified management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), currently consisting of the portfolio series, listed
on Schedule A hereto (the "Initial Portfolios"), each having its own investment
policies; and
WHEREAS, the Adviser is a Massachusetts trust company, and is in the
business of providing, among other things, fiduciary and investment advisory
services; and
WHEREAS, the Investment Company desires to retain the Adviser to render
investment advisory services to the Investment Company with respect to the
Initial Portfolios and possibly such other funds as the Investment Company and
the Adviser may agree upon (collectively, the "Funds"), and the Adviser is
willing to render such services;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the Investment Company and Adviser agree as follows:
1. APPOINTMENT OF ADVISER.
(a) INITIAL PORTFOLIOS. The Investment Company hereby appoints
the Adviser to act as investment adviser to the Initial Portfolios for the
period and on the terms set forth in this Agreement. The Adviser accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided. The Investment Company warrants that the Adviser
has been duly appointed to act hereunder.
(b) ADDITIONAL FUNDS. In the event that the Investment Company
establishes one or more Funds other than the Initial Portfolios with respect to
which it desires to retain the Adviser to render investment advisory services
hereunder, it shall so notify the Adviser in writing, indicating the advisory
fee to be payable with respect to the additional Fund. If the Adviser is willing
to render such services, it shall so notify the Investment Company in writing,
whereupon such Fund shall become a Fund hereunder. In such event a writing
signed by both the Investment Company and the Adviser shall be annexed hereto as
a part hereof indicating that such additional Fund has become a Fund hereunder
and reflecting the agreed-upon fee schedule for such Fund.
2. ADVISORY DUTIES. Subject to the supervision of the Board of
Trustees of the Investment Company, the Adviser shall manage the investment
operations and the composition of the Fund, including the purchase, retention
and disposition thereof, in accordance with the Fund's investment objective and
policies as stated in the Investment Company's Registration Statement. The
Adviser is authorized to engage one or more sub-advisers in connection with the
Adviser's duties under this Agreement, which sub-advisers
2
may be affiliates of the Adviser. The Adviser's duties hereunder are subject to
the following understandings:
(a) The Adviser shall provide supervision of investments,
furnish a continuous investment program for the Fund, determine from time to
time what investments or securities will be purchased, retained or sold by the
Fund, and what portion of the assets will be invested or held uninvested as
cash;
(b) The Adviser, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the Master Trust
Agreement, By-Laws and Registration Statement of the Investment Company and with
the instructions and directions of the Board of Trustees of the Investment
Company, provided, however, the Adviser shall not be responsible for acting
contrary to any of the foregoing that are changed without notice of such change
to the Adviser; and the Adviser shall conform to and comply with the applicable
requirements of the 1940 Act and all other applicable federal or state laws and
regulations.
(c) The Adviser shall promptly communicate to the officers and
Trustees of the Investment Company such information relating to Fund
transactions as they may reasonably request. On occasions when the Adviser deems
the purchase or sale of a security to be in the best interest of a Fund as well
an other clients, the Adviser, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or purchased, provided that
in the opinion of the Adviser, all accounts are treated equitably and fairly. In
such event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, shall be made by the Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to Investment Company and to such other clients;
(d) The Adviser shall maintain books and records with respect
to the Investment Company's securities transactions and shall render to the
Investment Company's Board of Trustees such periodic and special reports as the
Board may reasonably request;
(e) The Adviser shall provide the Investment Company with a
list of all securities transactions as reasonably requested by the Investment
Company; and
(f) The investment advisory services of the Adviser to the
Investment Company under this Agreement are not to be deemed exclusive, and the
Adviser shall be free to render similar services to others.
3. EXECUTION AND ALLOCATION OF PORTFOLIO BROKERAGE COMMISSION.
The Adviser, subject to and in accordance with any directions which the
Investment Company's Board of Trustees may issue from time to time, shall place,
in the name of the Investment Company, orders for the execution of the
securities transactions in which any Fund is authorized to invest. When placing
such orders, the primary objective of the Adviser shall be to obtain the most
favorable price and execution for the Investment Company but this requirement
shall not be deemed to obligate the Adviser to place any order solely on the
basis of obtaining the lowest commission rate if the other standards set forth
in this section have been satisfied. The Investment Company recognizes that
there are likely to be many cases in which different brokers are equally able to
provide such best price and execution and that, in selection among such brokers
with respect to particular trades, it is desirable to choose those brokers who
furnish "brokerage and research services" (as defined in Section 28(e)(3) of the
Securities and Exchange Act of 1934) or statistical quotations and other
information to the Investment Company and/or the Adviser in accordance with the
standards set forth below. Moreover, to the extent that it continues to be
lawful to do so and so long as the Board determines as a matter of general
policy that the Investment Company will benefit, directly of indirectly, by
doing so, the Adviser may place orders with a broker who charges a commission
for that transaction which is in
2
3
excess of the amount of commission that another broker would have charged for
effecting that transaction, provided that the excess commission is reasonable in
relation to the value of brokerage and research services provided by that
broker.
4. BOOKS AND RECORDS. The Adviser shall keep the Investment
Company's books and records required to be maintained by it pursuant to
paragraph 2(d) hereof. The Adviser agrees that all records which it maintains
for the Investment Company are the property of the Investment Company and it
shall surrender promptly to the Investment Company any of such records upon the
Investment Company's request. Nothing herein shall prevent the Adviser from
maintaining its own records as required by law, which may be a duplication of
the Investment Company's records.
5. REPORTS TO ADVISER. The Investment Company agrees to furnish
the Adviser at its principal office all prospectuses, proxy statements, reports
to stockholders, sales literature or other material prepared for distribution to
shareholders of the Investment Company or the public, which refer in any way to
the Adviser, ten (10) days prior to use thereof and not to use such material if
the Adviser should object thereto in writing within seven (7) days after receipt
of such material; provided, however, that the Adviser hereby approves all uses
of its name which merely refer in accurate terms to its appointment as
investment adviser hereunder, which merely identifies the Investment Company, or
which are required by the Securities and Exchange Commission or a state
securities commission. In the event of termination of this Agreement, the
Investment Company shall, on written request of the Adviser, forthwith delete
any reference to the Adviser from any materials described in the preceding
sentence. The Investment Company shall furnish or otherwise make available to
the Adviser such other information relating to the business affairs of the
Investment Company as the Adviser at any time, or from time to time, reasonably
requests in order to discharge its obligations hereunder.
6. PROXIES. Unless the Investment Company gives written
instructions to the contrary, the Adviser shall vote or not vote all proxies
solicited by or with respect to the issuers of securities in which assets of any
Fund may be invested. The Adviser shall use its best good faith judgment to vote
or not vote such proxies in a manner which best serves the interests of the
Investment Company's shareholders.
7. EXPENSES. During the term of this Agreement, the Adviser
shall pay all of its own expenses incurred by it in connection with its
activities under this Agreement and the Fund of the Investment Company shall
bear all expenses that are incurred in its operations not specifically assumed
by the Adviser.
Expenses borne by the Fund will include but not be limited to the
following (or the Fund's proportionate share of the following): (a) brokerage
commissions relating to securities purchased or sold by the Fund or any losses
incurred in connection therewith; (b) fees payable to and expenses incurred on
behalf of the Fund by the Investment Company's administrator; (c) expenses of
organizing the Investment Company and the Fund; (d) filing fees and expenses
relating to the registration and qualification of the Fund's shares and the
Investment Company under federal or state securities laws and maintaining such
registrations and qualifications; (e) fees and salaries payable to the
Investment Company's Trustees and officers who are not officers or employees of
the Investment Company's administrator, any investment adviser or underwriter of
the Investment Company; (f) taxes (including any income or franchise taxes) and
governmental fees; (g) costs of any liability, uncollectible items of deposit
and other insurance or fidelity bonds; (h) any costs, expenses or losses arising
out of any liability of or claim for damage or other relief asserted against the
Investment Company or the Fund for violation of any law; (i) legal, accounting
and auditing expenses, including legal fees of special counsel for the
independent Trustees; (j) charges of custodians, transfer agents and other
agents; (k) costs of preparing share certificates (if any); (l) expenses of
setting in type and printing Prospectuses and Statements of Additional
Information and supplements thereto for existing shareholders, reports and
statements to shareholders and proxy materials (m) any extraordinary
3
4
expenses (including fees and disbursements of counsel) incurred by the
Investment Company or the Fund; and (n) fees and other expenses incurred in
connection with membership in Investment Company organizations.
8. COMPENSATION OF THE ADVISER. For the services to be rendered
by the Adviser as provided in this Agreement, the Investment Company shall pay
to the Adviser such compensation as is designated in Schedule B to this
Agreement, so long as the Adviser has not waived all or a portion of such
compensation.
9. LIMITATION OF ADVISER'S LIABILITY. In the absence of (a)
willful misfeasance, bad faith or gross negligence on the part of the Adviser,
or any sub-adviser engaged by the Adviser pursuant to Section 2 hereof, in
performance of its obligations and duties hereunder or (b) reckless disregard by
the Adviser, or any sub-adviser engaged by the Adviser pursuant to Section 2
hereof, of its obligations and duties hereunder, the Adviser shall not be
subject to any liability whatsoever to the Investment Company, or to any
shareholder of the Investment Company, for any error of judgment, mistake of law
or any other act or omission in the course of, or connected with, rendering
services hereunder including, without limitation, for any losses that may be
sustained in connection with the purchase, holding, redemption or sale of any
security on behalf of the Investment Company.
10. DURATION AND TERMINATION.
(a) This Agreement shall become effective with respect to each
Fund on the date on which the Fund commences offering its shares to the public,
so long as with respect to any additional Funds, the provisions of Section l(b)
have been complied with. This Agreement, unless sooner terminated as provided
herein, shall continue for each Fund for two years following the effective date
of this Agreement with respect to the Fund, or the date of the first annual or
special meeting of the shareholders of the Fund following such effective date,
if approved by a majority of the outstanding voting securities of the Fund (as
defined in the 1940 Act), and thereafter shall continue automatically for
periods of one year so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Board of
Trustees of the Investment Company who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of any such party, cast in
person at a meeting called for the purpose of voting such approval, and (b) by
the Board of Trustees of the Investment Company or by vote of a majority of the
outstanding voting securities of the Fund.
(b) This Agreement may be terminated by the Investment Company
at any time, without the payment of any penalty, by vote of a majority of those
members of the Board of Trustees who are not "interested persons" (as defined in
the 0000 Xxx) of the Adviser or the Investment Company or by the majority vote
of either the entire Board of Trustees of the Investment Company or by vote of a
majority of the outstanding voting securities of the Fund on 60 days' written
notice to the Adviser. This Agreement may also be terminated by the Adviser on
60 days' written notice to the Investment Company. This Agreement will
automatically and immediately terminate in the event of its assignment (as
defined in the 1940 Act).
11. CHOICE OF LAW. This Agreement shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts and
any applicable federal law.
12. LIMITATION OF LIABILITY. The Master Trust Agreement dated
August 13, 1996, as amended from time to time, establishing the Investment
Company, which is hereby referred to and a copy of which is on file with the
Secretary of State of the State of Delaware, provides that the name
International Currency Fund means the Trustees from time to time serving (as
Trustees but not personally) under said Master Trust Agreement. It is expressly
acknowledged and agreed that the obligations of the Investment Company hereunder
shall not be binding upon any of the shareholders, Trustees, officers, employees
or agents of the
4
5
Investment Company, personally, but shall bind only the trust property of the
Investment Company, as provided in its Master Trust Agreement. The execution and
delivery of this Agreement have been authorized by the Trustees of the
Investment Company and signed by an officer of the Investment Company, acting as
such, and neither such authorization by such Trustees 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 trust property of the Investment Company as provided in its Master
Trust Agreement.
13. INITIALS "SSGA"; NAMES "STATE STREET" AND "STATE STREET GLOBAL
ADVISORS"; LOGOS. The Investment Company acknowledges that (i) the initials
"SSgA", (ii) the names "State Street" and "State Street Global Advisors", (iii)
the logo consisting of the initials "SSgA" with a globe inside the "g" and (iv)
all other related names, initials and logos (collectively with the names,
initials and logos referred to above, the "Marks") are the property of the
Adviser and its related entities and may be used by the Investment Company only
with the consent of the Adviser. The Adviser consents to the use by the
Investment Company of the Marks in such form as the Adviser shall in writing
approve, but only on condition and so long as (i) this Agreement shall remain in
full force and (ii) the Investment Company shall fully perform, fulfill and
comply with all provisions of this Agreement expressed herein to be performed,
fulfilled or complied with by it. No such name shall be used by the Investment
Company at any time or in any place or for any purposes or under any conditions
except as in this section provided. The foregoing authorization by the Adviser
to the Investment Company to use the Marks is not exclusive of the right of the
Adviser itself to use, or to authorize others to use, the same; the Investment
Company acknowledges and agrees that as between the Adviser and the Investment
Company, the Adviser has the exclusive right so to use, or authorize others to
use the Marks and the Investment Company agrees to take such action as may
reasonably be requested by the Adviser to give full effect to the provisions of
this section (including, without limitation, consenting to such use of the
Marks). Without limiting the generality of the foregoing, the Investment Company
agrees that, upon any termination of this Agreement by either party or upon the
violation of any of its provisions by the Investment Company, the Investment
Company will, at the request of the Adviser made within six months after the
Adviser has knowledge of such termination or violation, use its best efforts to
eliminate all reference, if any, to the initials "SSgA", and any other Marks and
will not thereafter transact any business in a name containing the initials
"SSgA" or any other Marks in any form or combination whatsoever, or designate
itself as the same entity as or successor to an entity of such name, or
otherwise use the initials "SSgA" or any other Xxxx or reference to the Adviser.
Such covenants on the part of the Investment Company shall be binding upon it,
its trustees, officers, stockholders, creditors and all other persons claiming
under or through it.
5
6
IN WITNESS WHEREOF, the due execution hereof as of the date first above
written.
Attest: INTERNATIONAL CURRENCY FUND
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
---------------------- --------------------------
Attest: STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxxxx Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
---------------------- --------------------------
Executive Vice President
6
7
SCHEDULE A
INITIAL PORTFOLIOS
------------------
U.S. Dollar Portfolio
Pound Sterling Portfolio
Deutsche Xxxx Portfolio
Canadian Dollar Portfolio
7
8
SCHEDULE B
FEE SCHEDULE
------------
For the services to be provided by the Adviser hereunder, the Investment
Company agrees that each Initial Portfolio shall pay to the Adviser a monthly
fee as soon as practical after the last day of each calendar month, which fee
shall be paid at a rate equal to twenty-five one hundredths of one percent
(.25%) on an annual basis of the average daily net asset value of such Portfolio
for such calendar month, commencing as of the date on which this Agreement
becomes effective with respect to such Portfolio.
In case of commencement or termination of this Agreement with respect to
any Portfolio during any calendar month, the fee with respect to such Portfolio
for that month shall be reduced proportionately based upon the number of
calendar days during which this agreement is in effect with respect to such
Portfolio, and the fee shall be computed based upon the average daily net asset
value of such Portfolio during such period.
8
