AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT EXHIBIT 4(a)
AGREEMENT made this 29th day of July, 2002, amending and restating the
agreement made the 17th day of January, 2001, which in turn amended and restated
the agreement made the 21st day of December, 1999, by and between MASTER LARGE
CAP SERIES TRUST, a Delaware business trust (hereinafter referred to as the
"Trust"), on behalf of itself and each of its series listed on Exhibit A (each,
a "Portfolio," and together, the "Portfolios") and FUND ASSET MANAGEMENT, L.P.,
a Delaware limited partnership (hereinafter referred to as the "Investment
Adviser").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as a diversified open-end
investment company registered under the Investment Company Act of 1940, as
amended (hereinafter referred to as the "Investment Company Act"); and
WHEREAS, the Trustees of the Trust (the "Trustees") are authorized to
establish separate series relating to separate portfolios of securities, each of
which may offer separate classes of shares; and
WHEREAS, the Trustees have established and designated each Portfolio as
a series of the Trust; and
WHEREAS, the Investment Adviser is engaged principally in rendering
management and investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Trust desires to retain the Investment Adviser to render
management and investment advisory services to the Trust and each Portfolio in
the manner and on the terms hereinafter set forth; and
WHEREAS, the Investment Adviser is willing to provide management and
investment advisory services to the Trust and each Portfolio on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the covenants
hereinafter contained, the Trust and the Investment Adviser hereby agree as
follows:
ARTICLE I
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Duties of the Investment Adviser
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The Trust hereby employs the Investment Adviser to act as a manager and
investment adviser of each Portfolio and to furnish or arrange for affiliates to
furnish, the management and investment advisory services described below,
subject to the policies of, review by and overall control of the Trustees, for
the period and on the terms and conditions set forth in this Agreement. 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. The Investment Adviser and its affiliates shall for all purposes herein
be deemed to be independent contractors and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Trust or
any of the Portfolios in any way or otherwise be deemed agents of the Trust or
any of the Portfolios.
(a) Management and Administrative Services. The Investment Adviser
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shall perform (or arrange for affiliates to perform) the management and
administrative services necessary for the operation of the Trust and each
Portfolio including administering shareholder accounts and handling shareholder
relations. The Investment Adviser shall provide the Trust and each Portfolio
with office space, equipment and facilities and such other services as the
Investment Adviser, subject to review by the Trustees, shall from time to time
determine to be necessary or useful to perform its obligations under this
Agreement. The Investment Adviser also shall, on behalf of the Trust and each
Portfolio, conduct relations with custodians, depositories, transfer agents,
dividend disbursing agents, other shareholder service agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers,
banks and such other persons in any such other capacity deemed to be necessary
or desirable. The Investment Adviser shall generally monitor the Trust's and
each Portfolio's compliance with investment policies and restrictions as set
forth in the currently effective prospectus and statement of additional
information relating to the shares of each Portfolio under the Investment
Company Act (the "Prospectus" and "Statement of Additional Information,"
respectively). The Investment Adviser shall make reports to the Trustees of its
performance of obligations hereunder and furnish advice and recommendations with
respect to such other aspects of the business and affairs of the Trust and the
each Portfolio as it shall determine to be desirable.
(b) Investment Advisory Services. The Investment Adviser shall provide
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(or arrange for affiliates to provide) the Trust with such investment research,
advice and supervision as the latter may from time to time consider necessary
for the proper supervision of the assets of each
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Portfolio, shall furnish continuously an investment program for each Portfolio
and shall determine from time to time which securities shall be purchased, sold
or exchanged and what portion of the assets of each Portfolio shall be held in
the various securities in which each Portfolio invests, options, futures,
options on futures or cash, subject always to the restrictions set forth in the
Declaration of Trust and By-Laws of the Trust, as amended from time to time, the
provisions of the Investment Company Act and the statements relating to each
Portfolio's investment objectives, investment policies and investment
restrictions as the same are set forth in the Prospectus and Statement of
Additional Information. The Investment Adviser shall also make decisions for the
Trust as to the manner in which voting rights, rights to consent to corporate
action and any other rights pertaining to each Portfolio's portfolio securities
shall be exercised. Should the Trustees 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
each Portfolio, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular to place all orders for
the purchase or sale of portfolio securities for each Portfolio's account with
brokers or dealers selected by it, and to that end, the Investment Adviser is
authorized as the agent of the Trust to give instructions to the custodian of
the Trust as to deliveries of securities and payments of cash for the account of
each Portfolio. In connection with the selection of such brokers or dealers and
the placing of such orders with respect to assets of each Portfolio, the
Investment Adviser is directed at all times to seek to obtain execution and
prices within the policy guidelines determined by the Trustees as set forth in
the Prospectus and Statement of Additional Information. 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 Trust is
affiliated.
(c) Affiliated Sub-Advisers. In carrying out its responsibilities
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hereunder, the Investment Adviser may employ, retain or otherwise avail itself
of the services of other persons or entities including without limitation,
affiliates of the Investment Adviser, on such terms as the Investment Adviser
shall determine to be necessary, desirable or appropriate. However, if the
Investment Adviser chooses to retain or avail itself of the services of another
person or entity to manage assets of the Trust, such other person or entity must
be (i) an affiliate of the Investment Adviser, (ii) retained at the Investment
Adviser's own cost and expense, and (iii) retained subject to the requirements
of Section 15 of the Investment Company Act. Retention of one or more affiliated
sub-advisers, or the employment or retention of other persons or entities to
perform services, shall in no way reduce the responsibilities or obligations of
the Investment Adviser under this Agreement and the Investment Adviser shall be
responsible for all acts and omissions of such affiliated sub-advisers, or other
persons or entities, in connection with the performance of the Investment
Adviser's duties hereunder.
(d) Notice Upon Change in Partners of Investment Adviser. The
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Investment Adviser is a limited partnership and its limited partner is Xxxxxxx
Xxxxx & Co., Inc. and its general partner is Princeton Services, Inc. The
Investment Adviser will notify the Trust of any change in the membership of the
partnership within a reasonable time after such change.
ARTICLE II
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Allocation of Charges and Expenses
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(a) The Investment Adviser. The Investment Adviser assumes and shall
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pay for maintaining the staff and personnel necessary to perform its obligations
under this Agreement, and shall at its own expense, provide the office space,
equipment and facilities which it is obligated to provide under Article I
hereof, and shall pay all compensation of officers of the Trust and all Trustees
of the Trust who are affiliated persons of the Investment Adviser.
(b) The Trust. The Trust assumes and shall pay or cause to be paid all
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other expenses of the Trust and the Portfolios (except for the expenses paid by
Princeton Funds Distributor, Inc. (the "Placement Agent"), including, without
limitation: redemption expenses, expenses of portfolio transactions, expenses of
registering shares under federal and state securities laws, pricing costs
(including the daily calculation of net asset value), expenses of printing
shareholder reports, stock certificates, prospectuses and statements of
additional information, Securities and Exchange Commission fees, interest,
taxes, custodian and transfer agency fees, fees and actual out-of-pocket
expenses of Trustees who are not affiliated persons of the Investment Adviser,
fees for legal and auditing services, litigation expenses, costs of printing
proxies and other expenses related to shareholder meetings, and other expenses
properly payable by the Trust or the Portfolios. It is also understood that if
the Investment Adviser provides accounting services to the Trust and the
Portfolios, the Trust and the Portfolios will reimburse the Investment Adviser
for its cost in providing such accounting services. The Placement Agent will pay
certain of the expenses of each Portfolio incurred in connection with the
continuous offering of Portfolio shares.
ARTICLE III
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Compensation of the Investment Adviser
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Advisory Fee. For the services rendered, the facilities furnished and
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expenses assumed by the Investment Adviser, the Trust shall pay to the
Investment Adviser at the end of each calendar month a fee based upon the
average daily value of the net assets of each Portfolio, as determined and
computed in accordance with the description of the determination of net asset
value contained in the Prospectus and Statement of Additional Information. Such
fee for each of Master Large Cap Series Growth Portfolio and Master Large Cap
Series Value Portfolio shall be at the annual rate of 0.50% of the average daily
net assets of the respective Portfolio, commencing on the day following
effectiveness hereof. Such fee for Master Large Cap Series Core Portfolio shall
be at the annual rate of 0.50% of the average daily net assets of the Portfolio
not exceeding $1.0 billion and 0.45% of the average daily net assets of the
Portfolio in excess of $1.0 billion, commencing on the day following
effectiveness hereof. 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 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 Trustees, the net asset value of a share as of the last business day
prior to such suspension shall for this purpose be deemed to be the net asset
value at the close of each succeeding business day until it is again determined.
ARTICLE IV
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Limitation of Liability of the Investment Adviser
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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 management of the Trust and each Portfolio, 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 IV, the term "Investment Adviser" shall include any affiliates
of the Investment Adviser performing services for the Trust or the Portfolios
contemplated hereby and directors, officers and employees of the Investment
Adviser and such affiliates.
ARTICLE V
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Activities of the Investment Adviser
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The services of the Investment Adviser to the Trust and the Portfolios
are not to be deemed to be exclusive, and the Investment Adviser and any person
controlled by or under common control with the Investment Adviser (for purposes
of Article V referred to as "affiliates") is free to render services to others.
It is understood that Trustees, officers, employees and shareholders of the
Trust and each Portfolio are or may become interested in the Investment Adviser
and its affiliates, as directors, officers, employees and shareholders or
otherwise and that directors, officers, employees and shareholders of the
Investment Adviser and its affiliates are or may become similarly interested in
the Trust and any of the Portfolios, and that the Investment Adviser and
directors, officers, employees, partners and shareholders of its affiliates may
become interested in the Trust or any of the Portfolios as shareholders or
otherwise.
ARTICLE VI
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Duration and Termination of this Contract
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This Agreement shall become effective as of the date first above
written and shall remain in force until December 31, 2002, and thereafter, but
only so long as such continuance is specifically approved at least annually by
(i) the Trustees, or by the vote of a majority of the outstanding voting
securities of each Portfolio, and (ii) a majority of those Trustees 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 Trustees or by the vote of a majority of the outstanding
voting securities of each Portfolio, or by the Investment Adviser, on sixty
days' written notice to the other party. This Agreement shall automatically
terminate in the event of its assignment.
ARTICLE VII
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Amendments of this Agreement
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This Agreement may be amended by the parties only if such amendment is
specifically approved by (i) the Trustees or by the vote of a majority of
outstanding voting securities of each Portfolio, and (ii) a majority of those
Trustees 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.
ARTICLE VIII
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Definitions of Certain Terms
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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 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 the
Investment Company Act.
ARTICLE IX
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Governing Law
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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.
ARTICLE X
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Limitation of Obligations of each Portfolio
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The obligations of each Portfolio shall be limited to the assets of
that Portfolio, shall be separate from the obligations of any other series of
the Trust, and each Portfolio shall not be liable for the obligations of any
other series of the Trust.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
MASTER LARGE CAP SERIES TRUST
By: /s/ XXXXX XXXXX
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Name:
Title:
FUND ASSET MANAGEMENT, L.P.
By: PRINCETON SERVICES, INC.
General Partner
By: /s/ XXXXX XXXXX
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Name:
Title:
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