EXHIBIT (6)(A)
FIRSTHAND FUNDS
MASTER INVESTMENT ADVISORY AGREEMENT
This Master Investment Advisory Agreement ("Agreement"), is made and
entered into as of August 19, 2002 by and between FIRSTHAND FUNDS, a Delaware
business trust (the "Trust") and FIRSTHAND CAPITAL MANAGEMENT, INC., (the
"Adviser") each having its principal place of business at 000 Xxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxxxxxxxxx 00000.
WHEREAS, the Trust and the Adviser have entered into the following
Investment Advisory Agreements which contain, with the exception of the dates
and the series of the Trust to which they relate, identical terms and
conditions: an Investment Advisory Agreement dated September 9, 1999 with
respect to each of Firsthand Technology Value Fund, Firsthand Technology
Innovators Fund and Firsthand Technology Leaders Fund; an Investment Advisory
Agreement dated September 30, 1999 with respect to Firsthand e-Commerce Fund;
and an Investment Advisory Agreement dated August 19, 2000 with respect to
Firsthand Global Technology Fund; and
WHEREAS, the Trust and the Adviser desire to combine the above-referenced
Investment Advisory Agreements into a Master Investment Advisory Agreement; and
WHEREAS, the Trust and the Adviser desire to clarify that the Adviser shall
reduce its fees and/or make reimbursement of expenses of a series of the Trust
to the extent necessary to limit the total annual operating expenses of each
series, net of Rule 12b-1 fees and shareholder servicing fees, if any, to the
amounts set forth in the current Investment Advisory Agreements;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. The Trust hereby appoints the Adviser to continue to manage the investment
and reinvestment of assets of the series of the Trust (the "Funds"), listed
on Schedule A attached hereto for the period and on the terms set forth in
this Agreement. In the event that the Trust establishes one or more
additional portfolios or funds ("Additional Funds") with respect to which
it wishes to retain the Adviser to act as investment adviser hereunder, the
Trust shall notify the Adviser in writing. Upon written acceptance by the
Adviser, such Additional Funds shall be listed on an amended Schedule A and
shall become subject to the provisions of this Agreement to the same extent
as the existing Funds, except to the extent that such provisions (including
those relating to the compensation and expenses payable by the Trust and
its Funds) may be modified with respect to each Additional Fund in writing
by the Trust and the Adviser at the time of the addition of the Additional
Fund. The Adviser accepts such appointment and agrees to continue to render
the services herein set forth, for the compensation herein provided.
2. Each Fund shall at all times inform the Adviser as to the securities owned
by it, the funds available or to become available for investment by it, and
generally as to the condition of its affairs. It shall furnish the Adviser
with such other documents and information with regard to its affairs as the
Adviser may from time to time reasonably request.
3. Subject to the direction and control of the Trust's Board of Trustees, the
Adviser shall regularly provide each Fund with investment research, advice,
management and supervision and shall furnish a continuous investment
program for the Fund's portfolio of securities consistent with the Fund's
investment objective, policies, and limitations as stated in the Fund's
current Prospectus and Statement of Additional Information. The Adviser
shall determine from time to time what securities will be purchased,
retained or sold by each Fund, and shall implement those decisions, all
subject to the provisions of the Trust's Declaration of Trust, the
Investment Company Act of 1940, as amended (the "1940 Act"), the applicable
rules and regulations of the Securities and Exchange Commission, and other
applicable federal and state laws, as well as the investment objectives,
policies, and limitations of the Fund. In placing orders for a Fund with
brokers and dealers with respect to the execution of the Fund's securities
transactions, the Adviser shall attempt to obtain the best net results. In
doing so, the Adviser may consider such factors which it deems relevant to
the relevant Fund's best interest, such as price, the size of the
transaction, the nature of the market for the security, the amount of the
commission, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer involved and the quality of
service rendered by the broker-dealer in other transactions. The Adviser
shall have the discretionary authority to utilize certain broker-dealers
even though it may result in the payment by a Fund of an amount of
commission for effecting a securities transaction in excess of the amount
of commission another broker-dealer would have charged for effecting that
transaction; provided, however, that the Adviser had determined that such
amount of commission was reasonable in relation to the value of the
brokerage and research services provided by the broker-dealer effecting the
transaction. In no instance will portfolio securities be purchased from or
sold to the Adviser or any affiliated person thereof on behalf of a Fund
except in accordance with the rules and regulations promulgated by the
Securities and Exchange Commission pursuant to the 0000 Xxx. The Adviser
shall also provide advice and recommendations with respect to other aspects
of the business and affairs of the Funds and shall perform such other
functions of management and supervision as may be directed by the Board of
Trustees of the Trust, provided that in no event shall the Adviser be
responsible for any expense occasioned by the performance of such
functions.
4. The Adviser is responsible for (1) compensation of any of the Trust's
trustees, officers and employees who are interested persons of the Adviser
and (2) compensation of the Adviser's personnel and other expenses incurred
in connection with the provisions of portfolio management services under
this Agreement. Other than as herein specifically indicated, the Adviser
shall not be responsible for any Fund's expenses. Specifically, the Adviser
will not be responsible, except to the extent of the reasonable
compensation of employees of a Fund whose services may be used by the
Adviser hereunder, for any of the following expenses of such Fund, which
expenses shall be borne by that Fund: legal and audit expenses,
organization expenses; interest; taxes; governmental fees; fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; the cost (including brokerage commissions
or charges, if any) of securities purchased or sold by the Fund and any
losses incurred in connection therewith; fees of custodian, transfer
agents, registrars or other agents; distribution fees; expenses of
preparing share certificates; expenses relating to the redemption or
purchase of the Fund's shares; expenses of registering and qualifying Fund
shares for sale under applicable federal and state law and maintaining such
registrations and qualification; expenses of preparing, setting in print,
printing and distributing
prospectuses, proxy statements, reports, notices and dividends to Fund
shareholders; cost of stationery; costs of shareholders and other meetings
of the Fund; compensation and expenses of the independent trustees of the
Trust; and the Fund's pro rata portion of premiums of any fidelity bond and
other insurance covering the Trust and its officers and trustees.
5. No trustee, officer or employee of the Trust Fund shall receive from any
Fund any salary or other compensation as such trustee, officer or employee
while he is at the same time a director, officer or employee of the Adviser
or any affiliated company of the Adviser. This paragraph shall not apply to
trustees, executive committee members, consultants and other persons who
are not regular members of the Adviser's or any affiliated company's staff.
6. As compensation for the services performed by the Adviser, each Fund shall
pay the Adviser, as promptly as possible after the last day of each month,
a fee, accrued each calendar day (including weekends and holidays) at the
rate based on such Fund's average daily net assets as set forth on Schedule
A attached hereto. The Adviser shall reduce such fee or, if necessary, make
expense reimbursements to each Fund to the extent required to limit the
total annual operating expenses of such Fund (net of Rule 12b-1 and
shareholder servicing fees, is any) to the amounts set forth on Schedule A
attached hereto. The daily net assets of the Funds shall be computed as of
the time of the regular close of business of the New York Stock Exchange or
such other time as may be determined by the Board of Trustees of the Fund.
Any of such payments as to which the Adviser may so request shall be
accompanied by a report of the applicable Fund prepared either by the Fund
or by a reputable firm of independent accountants which shall show the
amount properly payable to the Adviser under this Agreement and the
detailed computation thereof.
7. The Adviser assumes no responsibility under this Agreement other than to
render the services called for hereunder in good faith, and shall not be
responsible for any action of the Board of Trustees of the Trust in the
following or declining to follow any advice or recommendation of the
Adviser; provided that nothing in this Agreement shall protect the Adviser
against any liability to any Fund or its stockholders to which it would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder.
8. The Adviser shall be an independent contractor and shall have no authority
to act for or represent any Fund in its investment commitments unless
otherwise provided. No agreement, bid, offer, commitment, contract or other
engagement entered into by the Adviser whether on behalf of the Adviser or
whether purporting to have been entered into on behalf of a Fund shall be
finding upon that Fund, and all acts authorized to be done by the Adviser
under this Agreement shall be done by it as an independent contractor and
not as an agent.
9. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Adviser who may also be a trustee,
officer, or employee of the Trust to engage in any other business or to
devote his time and attention in part to the management or other aspects of
any other business, whether of a similar nature or a
dissimilar nature, nor to limit or restrict the right of the Adviser to
engage in any other business or to render services of any kind, including
investment advisory and management services, to any other corporation,
firm, individual or association.
10. As used in this Agreement, the terms "assignment," "interested person," and
"majority of the outstanding voting securities" shall have the meanings
given to them by Section 2(a) of the 1940 Act, subject to such exemptions
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order.
11. This Agreement shall terminate automatically in the event of its assignment
by the Adviser and shall not be assignable by the Trust without the consent
of the Adviser. This Agreement may also be terminated at any time with
respect to a Fund, without the payment of penalty, by the Trust on behalf
of such Fund or by the Adviser on sixty (60) days' written notice addressed
to the other party at its principal place of business.
12. This Agreement shall become effective on the date hereof and shall continue
in effect with respect to a Fund for one year and from year to year
thereafter only so long as specifically approved annually, (1) by vote of a
majority of the trustees of the Trust who are not parties to this Agreement
or interested persons of such parties, cast in person at a meeting called
for that purpose, and, (2) either by vote of the holders of a majority of
the outstanding voting securities of such Fund or by a majority vote of the
Trust's Board of Trustees.
13. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination
is sought, and no materials amendment of this Agreement shall be effective
with respect to a Fund until approved by vote of the holders of a majority
of such Fund's outstanding voting securities.
14. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and sealed by their officers thereunto duly authorized on the day and year first
above written.
FIRSTHAND FUNDS
By /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: President
FIRSTHAND CAPITAL MANAGEMENT, INC.
By /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: President
SCHEDULE A
FEE AS A PERCENTAGE OF TOTAL ANNUAL OPERATING
FUND NAME AVERAGE DAILY NET ASSETS EXPENSE LIMITATION
--------- ------------------------ ------------------
Firsthand Technology 1.50% 1.95% of its average daily net assets
Value Fund up to $200 million; 1.90% of such assets
from $200 million to $500 million; 1.85%
of such assets from $500 million to $1
billion; and 1.80% of such assets in excess
of $1 billion
Firsthand Technology 1.50% 1.95% of its average daily net assets up to
Leaders Fund $200 million; 1.90% of such assets from $200
million to $500 million; 1.85% of such assets
from $500 million to $1 billion; and 1.80% of
such assets in excess of $1 billion
Firsthand Technology 1.50% 1.95% of its average daily net assets up to
Innovators Fund $200 million; 1.90% of such assets from $200
million to $500 million; 1.85% of such assets
from $500 million to $1 billion; and 1.80% of
such assets in excess of $1 billion
Firsthand e-Commerce Fund 1.50% 1.95% of its average daily net assets up to
$200 million; 1.90% of such assets from $200
million to $500 million; 1.85% of such assets
from $500 million to $1 billion; and 1.80% of
such assets in excess of $1 billion
Firsthand Global Technology 1.50% 1.95% of its average daily net assets up to
Fund $200 million; 1.90% of such assets from $200
million to $500 million; 1.85% of such
assets from $500 million to $1 billion; and 1.80% of
such assets in excess of $1 billion
