Exhibit (g)(1)
XXXXX XXXXX TAX-MANAGED PREMIUM AND DIVIDEND INCOME FUND
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 14th day of November, 2005, between Xxxxx Xxxxx Tax-Managed
Premium and Dividend Income Fund, a Massachusetts business trust (the "Trust"),
and Xxxxx Xxxxx Management, a Massachusetts business trust (the "Adviser").
1. Duties of the Adviser. The Trust hereby employs the Adviser to act as
investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and to administer its affairs, subject to the supervision of
the Trustees of the Trust, for the period and on the terms set forth in this
Agreement.
The Adviser hereby accepts such employment, and undertakes to afford to the
Trust the advice and assistance of the Adviser's organization in the choice of
investments and in the purchase and sale of securities for the Trust and to
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Trust
and to pay the salaries and fees of all officers and Trustees of the Trust who
are members of the Adviser's organization and all personnel of the Adviser
performing services relating to research and investment activities. The Adviser
shall for all purposes herein be deemed to be an independent contractor and
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shall, except as otherwise expressly provided or authorized, have no authority
to act for or represent the Trust in any way or otherwise be deemed an agent of
the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of the Trust. As investment adviser to the Trust, the Adviser shall
furnish continuously an investment program and shall determine from time to time
what securities and other investments shall be acquired, disposed of or
exchanged and what portion of the Trust's assets shall be held uninvested,
subject always to the applicable restrictions of the Declaration of Trust,
By-Laws and registration statement of the Trust. Should the Trustees of the
Trust at any time, however, make any specific determination as to investment
policy for the Trust and notify the Adviser thereof in writing, the 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notice or until similarly notified that such determination has been revoked.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
Adviser shall take, on behalf of the Trust, all actions that it deems necessary
or desirable to implement the investment policies of the Trust.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of the Trust either directly with the issuer or with
brokers or dealers selected by the Adviser, and, to that end, the Adviser is
authorized, as the agent of the Trust, to give instructions to the custodian of
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the Trust as to deliveries of securities and payments of cash for the account of
the Trust. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser shall adhere to procedures adopted by the
Board of Trustees of the Trust.
The Adviser shall not be responsible for providing certain special
administrative services to the Trust under this Agreement. Xxxxx Xxxxx
Management, in its capacity as Administrator of the Trust, shall be responsible
for providing such services to the Trust under the Trust's separate
Administration Agreement.
2. Compensation of the Adviser. For the services, payments and facilities to be
furnished hereunder by the Adviser, the Adviser shall be entitled to receive
from the Trust compensation in an amount equal to 1.00% annually of the average
daily gross assets of the Trust. (For purposes of this calculation, "gross
assets" of the Trust shall mean total assets of the Trust, including any form of
investment leverage, minus all accrued expenses incurred in the normal course of
operations, but not excluding any liabilities or obligations attributable to
investment leverage obtained through (i) indebtedness of any type (including,
without limitation, borrowing through a credit facility or the issuance debt
securities), (ii) the issuance of preferred stock or other similar preference
securities, (iii) the reinvestment of collateral received for securities loaned
in accordance with the Trust's investment objectives
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and policies, and/or (iv) any other means.)
Such compensation shall be paid monthly in arrears on the last business day of
each month. The Trust's net assets shall be computed in accordance with the
Declaration of Trust of the Trust and any applicable votes and determinations of
the Trustees of the Trust.
In case of initiation or termination of the Agreement during any month, the fee
for that month shall be reduced proportionately on the basis of the number of
calendar days during which the Agreement is in effect and the fee shall be
computed upon the basis of the average gross assets for the business days the
Agreement is so in effect for that month.
The Adviser may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Trust will pay
all expenses other than those expressly stated to be payable by the Adviser
hereunder, which expenses payable by the Trust shall include, without implied
limitation (i) expenses of maintaining the Trust and continuing its existence;
(ii) registration of the Trust under the Investment Company Act of 1940; (iii)
commissions, spreads, fees and other expenses connected with the acquisition,
holding and disposition of securities and other investments; (iv) auditing,
accounting and legal expenses; (v) taxes and interest; (vi) governmental fees;
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(vii) expenses of listing shares of the Trust with a stock exchange, and
expenses of issue, sale, repurchase and redemption (if any) of interests in the
Trust, including expenses of conducting tender offers for the purpose of
repurchasing Trust interests; (viii) expenses of registering and qualifying the
Trust and its shares under federal and state securities laws and of preparing
and filing registration statements and amendments for such purposes; (ix)
expenses of reports and notices to shareholders and of meetings of shareholders
and proxy solicitations therefore; (x) expenses of reports to governmental
officers and commissions; (xi) insurance expenses; (xii) association membership
dues; (xiii) fees, expenses and disbursements of custodians and subcustodians
for all services to the Trust (including, without limitation, safekeeping of
funds, securities and other investments, keeping of books, accounts and records,
and determination of net asset values); (xiv) fees, expenses and disbursements
of transfer agents, dividend disbursing agents, shareholder servicing agents and
registrars for all services to the Trust; (xv) expenses for servicing
shareholder accounts; (xvi) any direct charges to shareholders approved by the
Trustees of the Trust; (xvii) compensation and expenses of Trustees of the Trust
who are not members of the Adviser's organization; (xviii) pricing and valuation
services employed by the Trust; (xix) all expenses incurred in connection with
leveraging of Trust's assets through a line of credit, or issuing and
maintaining preferred shares; and (xx) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees, officers and
shareholders with respect thereto.
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4. Other Interests. It is understood that Trustees and officers of the Trust and
shareholders of the Trust are or may be or become interested in the Adviser as
trustees, officers, employees, shareholders or otherwise and that trustees,
officers and shareholders of the Adviser are or may be or become similarly
interested in the Trust, and that the Adviser may be or become interested in the
Trust as a shareholder or otherwise. It is also understood that trustees,
officers, employees and shareholders of the Adviser may be or become interested
(as directors, trustees, officers, employees, shareholders or otherwise) in
other companies or entities (including, without limitation, other investment
companies) that the Adviser may organize, sponsor or acquire, or with which it
may merge or consolidate, and which may include the words "Xxxxx Xxxxx" or any
combination thereof as part of their name, and that the Adviser or its
subsidiaries or affiliates may enter into advisory or management agreements or
other contracts or relationships with such other companies or entities.
5. Limitation of Liability of the Adviser. The services of the Adviser to the
Trust are not to be deemed to be exclusive, the Adviser being free to render
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services to others and engage in other business activities. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the Adviser shall
not be subject to liability to the Trust or to any shareholder of the Trust for
any act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the acquisition, holding or
disposition of any interest in a Loan or of any security, investment or other
asset.
6. Sub-Investment Advisers. The Adviser may employ one or more sub-investment
advisers from time to time to perform such of the acts and services of the
Adviser provided for by this Agreement, including the selection of brokers or
dealers to execute the Trust's portfolio security transactions, and upon such
terms and conditions as may be agreed upon between the Adviser and such
sub-investment adviser and approved by the Trustees of the Trust, all as
permitted by the Investment Company Act of 1940. This provision does not limit
the Adviser's ability, pursuant to this Agreement, to provide the services
contemplated without the assistance of a sub-investment adviser. Moreover,
subject to approval of the Trust's Board of Trustees, the Adviser retains
complete authority at any time immediately to assume direct responsibility for
any function delegated to a sub-investment adviser pursuant to this Section 6
without the need for any approval by the holders of the voting securities of the
Trust.
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7. Duration and Termination of this Agreement. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect through and including November
14, 2007 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after November 14, 2007 is specifically
approved at least annually (i) by the Board of Trustees of the Trust or by vote
of a majority of the outstanding voting securities of the Trust and (ii) by the
vote of a majority of those Trustees of the Trust who are not interested persons
of the Adviser or the Trust cast in person at a meeting called for the purpose
of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written notice to
the other, terminate this Agreement without the payment of any penalty, by
action of Trustees of the Trust or the trustees of the Adviser, as the case may
be, and the Trust may, at any time upon such written notice to the Adviser,
terminate this Agreement by vote of a majority of the outstanding voting
securities of the Trust. This Agreement shall terminate automatically in the
event of its assignment.
8. Amendments of the Agreement. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of the Adviser or the Trust
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by vote of a majority of the outstanding voting securities of the
Trust, except for any such amendment as may be effected in the absence of such
approval without violating the Investment Company Act of 1940.
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9. Limitation of Liability. The Adviser expressly acknowledges the provision in
the Declaration of Trust of the Trust limiting the personal liability of the
Trustees, officers and shareholders of the Trust, and the Adviser hereby agrees
that it shall have recourse to the Trust for payment of claims or obligations as
between the Trust and the Adviser arising out of this Agreement and shall not
seek satisfaction from any Trustee, officer or shareholders of the Trust.
10. Use of the Name "Xxxxx Xxxxx". The Adviser hereby consents to the use by the
Trust of the name "Xxxxx Xxxxx" as part of the Trust's name; provided, however,
that such consent shall be conditioned upon the employment of the Adviser or one
of its affiliates as the investment adviser of the Trust. The name "Xxxxx Xxxxx"
or any variation thereof may be used from time to time in other connections and
for other purposes by the Adviser and its affiliates and other investment
companies that have obtained consent to the use of the name "Xxxxx Xxxxx". The
Adviser shall have the right to require the Trust to cease
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using the name "Xxxxx Xxxxx" as part of the Trust's name if the Trust ceases,
for any reason, to employ the Adviser or one of its affiliates as the Trust's
investment adviser. Future names adopted by the Trust for itself, insofar as
such names include identifying words requiring the consent of the Adviser, shall
be the property of the Adviser and shall be subject to the same terms and
conditions.
11. Certain Definitions. The terms "assignment" and "interested persons" when
used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of
shareholders, of the lesser of (a) 67 per centum or more of the shares of the
Trust present or represented by proxy at the meeting if the shareholders of more
than 50 per centum of the shares of the Trust are present or represented by
proxy at the meeting, or (b) more than 50 per centum of the shares of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.
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XXXXX XXXXX TAX-MANAGED PREMIUM AND DIVIDEND INCOME FUND
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
President, and not Individually
XXXXX XXXXX MANAGEMENT
By: /s/ Xxxxxxxxx X. Marius
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Xxxxxxxxx X. Marius
Vice President, and not Individually
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