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Exhibit 2(g)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of ____________________, 1998 between
CHARTWELL DIVIDEND AND INCOME FUND, INC., a Maryland corporation (the "Fund"),
and CHARTWELL INVESTMENT PARTNERS, L.P., a Pennsylvania limited partnership (the
"Manager").
WHEREAS, the Fund is registered as a closed-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Manager is engaged principally in the business of
rendering investment management services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"); and
WHEREAS, the Fund desires to retain the Manager to furnish
investment advisory services to the Fund and the Manager is willing to furnish
such services;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Fund hereby appoints the Manager to act as
its investment manager for the period and on the terms set forth in this
Agreement. The Manager accepts such appointment and agrees to furnish the
services herein set forth, for the compensation herein provided.
2. MANAGEMENT. Subject to the supervision of the Fund's Board
of Directors, the Manager will perform the following services:
(i) Provide a continuous investment program
and strategy for the Fund, including investment research and
management with respect to all securities and investments and
cash equivalents in the Fund, determining from time to time
what securities and other investments will be invested,
reinvested, owned, held or traded by the Fund. The Manager
will provide the services under this Agreement in accordance
with the Fund's investment objective, policies and
restrictions as stated in the Prospectus of the Fund and
resolutions of the Fund's Board of Directors adopted from time
to time;
(ii) The Manager shall, to the extent requested
by the Board of Directors, provide the personnel to act as
officers of the Fund and pay the salaries of such
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officers, and shall furnish office facilities and equipment,
and related services necessary for the operation of the Fund;
(iii) Transmit information concerning purchases
and sales of the Fund's portfolio securities to the custodian
for proper settlement;
(iv) Supply the Fund and its Board of Directors
with reports and statistical data as requested; and
(v) Prepare a quarterly brokerage allocation
summary and monthly security transaction listing for the Fund.
3. OTHER COVENANTS.
The Manager further agrees that:
(i) It will maintain its registration under
the Advisers Act, adopt a Code of Ethics and provide reports
with respect thereto to the Board of Directors of the Fund,
and will conform with all applicable Rules and Regulations of
the Securities and Exchange Commission;
(ii) It will place orders pursuant to its
investment determinations for the Fund either directly with
the issuer or with any broker or dealer. In executing
portfolio transactions and selecting brokers or dealers, the
Manager will use its best efforts to seek on behalf of the
Fund the best overall terms available. In assessing the best
overall terms available for any transaction, the Manager shall
consider all factors that 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, both for the specific transaction and on a
continuing basis. In evaluating the best overall terms
available, and in selecting the broker dealer to execute a
particular transaction, the Manager 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 the Fund and/or other accounts over which the Manager or an
affiliate of the Manager exercises investment discretion. The
Manager is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for
executing a portfolio transaction for the Fund which is in
excess of the amount of commission another broker or
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dealer would have charged for effecting that transaction if,
but only if, the Manager 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 the overall responsibilities of the Manager to the
Fund. In addition, the Manager is authorized to take into
account the sale of shares of the Fund in allocating to
brokers or dealers purchase and sale orders for the Fund's
portfolio securities, provided that the Manager believes that
the quality of the transaction and the commission are
comparable to what they would be with other qualified firms.
The Manager will make investment decisions for the Fund
independently from those of other clients of the Manager.
However, the same security may be held in the portfolio of
more than one client when the same security is believed suited
for the investment objectives of more than one client. Should
two or more clients of the Manager simultaneously be engaged
in the purchase or sale of the same security, to the extent
possible, the transactions will be allocated as to price and
amount in a manner fair and equitable to each client;
(iii) It will maintain or supervise the
maintenance of all books and records with respect to the
securities transactions of the Fund and will furnish the
Fund's Board of Directors with such periodic and special
reports as the Board may request;
(iv) It will treat confidentially and as
proprietary information of the Fund all records and other
information relative to the Fund and prior, present or
potential shareholders, and will not use such records and
information for any purpose other than performance of its
responsibilities and duties hereunder (except after prior
notification to and approval in writing by the Fund, which
approval may not be withheld where the Manager would be
exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly
constituted authorities); and
(v) All software code owned by the Manager or
under its control, used in the performance of its obligations
under this Agreement, will be Year 2000 Compliant. For
purposes of this paragraph, "Year 2000 Compliant" means that
the software will continue to operate after December 31, 1999
without creating any logical or mathematical inconsistencies
concerning any date after December 31, 1999 and without
decreasing the
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functionality of the system applicable to dates prior to
January 1, 2000 including, but not limited to, making changes
to (i) date and data century recognition; (ii) calculations
which accommodate same- and multi-century formulas and date
values; and (iii) input/output of date values which reflect
century dates.
4. SUB-ADVISOR. The Manager may employ or contract with other
persons to assist it in the performance of this Agreement (each, a
"Sub-Advisor"); provided, however, that the retention of any Sub-Advisor shall
be approved as may be required by the 1940 Act. A Sub-Advisor may perform under
the supervision of the Manager any or all services described elsewhere in this
Agreement. Sub-Advisors may include other investment advisory or management
firms and officers or employees who are employed by both the Manager and the
Fund. The fees or other compensation of any Sub-Advisor shall be paid by the
Manager and no obligation may be incurred on the Fund's behalf to any such
person.
In the event that the Manager appoints a Sub-Advisor, the
Manager will review, monitor, and report to the Fund's Board of Directors on the
performance and investment procedures of any such Sub-Advisor, and assist and
consult with any Sub-Advisor in connection with the Fund's continuous investment
program. In the event that any Sub-Advisor appointed hereunder is terminated,
the Manager may provide investment management services pursuant to this
Agreement to the Fund without further shareholder approval.
5. SERVICES NOT EXCLUSIVE. The investment management services
furnished by the Manager hereunder are deemed not to be exclusive, and the
Manager shall be free to furnish similar services to others so long as its
services under this Agreement are not impaired thereby. The Manager will for all
purposes herein be deemed to be an independent contractor and will, unless
otherwise expressly authorized, have no authority to act for or represent the
Fund in any way or otherwise be deemed to be its agent.
6. BOOKS AND RECORDS. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Manager hereby agrees that all records which
it maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's request. The
Manager further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act, and to permit the Fund access to the Manager's records upon the Fund's
request.
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7. EXPENSES. During the term of this Agreement, the Manager
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Fund.
8. COMPENSATION. For the services provided to the Fund
pursuant to this Agreement, the Fund will pay to the Manager and the Manager
will accept as full compensation therefor, a fee, payable on or before the tenth
(10th) day of each calendar month, at the annual rate of 0.95% of the Fund's
Managed Assets (as defined below). Such fees shall be reduced as required by
expense limitations imposed upon the Fund by any state in which shares of the
Fund are sold. Reductions shall be made at the time of each monthly payment on
an estimated basis, if appropriate, and an adjustment to reflect the reduction
on an annual basis shall be made, if necessary, in the fee payable with respect
to the last month in any calendar year of the Fund. The Manager shall within ten
(10) days after the end of each calendar year refund any amount paid in excess
of the fee determined to be due for such year.
If this Agreement shall become effective subsequent to the
first day of a month, or shall terminate before the last day of a month, the
Manager's compensation for such fraction of the month shall be determined by
applying the foregoing percentage to the Fund's Managed Assets during such
fraction of a month (calculated on an average daily basis if such fraction of a
month is less than a week) and in the proportion that such fraction of a month
bears to the entire month.
"Managed Assets" means the average weekly value of the Fund's
total assets minus the sum of the Fund's liabilities, which liabilities exclude
debt relating to leverage, short-term debt and the aggregate liquidation
preference of any outstanding preferred stock.
9. LIMITATION OF LIABILITY. The Manager shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with the performance of this Agreement, except a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Manager in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement. Any
person, even though also an officer, partner, employee, or agent of the Manager,
who may be or become an officer, director, employee or agent of the Fund, shall
be deemed, when rendering service to the Fund or acting on any business of the
Fund (other than services or business in connection with the Manager's duties as
investment advisor hereunder), to be rendering such services to or acting
solely,
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for, the Fund and not as an officer, partner, employee or agent or one under the
control or direction of the Manager even though paid by it.
10. LICENSE. The Manager hereby grants to the Fund a license
to use the xxxx "Chartwell" in the name of the Fund. In connection with this
license, the Fund acknowledges that: (i) the Manager owns all rights in and to
the xxxx "Chartwell," (ii) the Manager controls the quality of the services
furnished in connection with such xxxx pursuant to this Agreement, (iii) all use
of this xxxx as part of the name of the Fund shall inure to the benefit of the
Manager as licensor, and (iv) should the Manager or an affiliate cease to be
the investment manager of the Fund, the Fund shall cease to use the xxxx
"Chartwell."
11. DURATION AND TERMINATION. This Agreement will become
effective on the date first written above, and unless sooner terminated as
provided herein, shall continue in effect for two (2) years. Thereafter, if not
terminated, this Agreement shall continue in effect for successive annual
periods, provided such continuance is specifically approved at least annually
(a) by the vote of a majority of those members of the Fund's Board of Directors
who are not interested persons of any party to this Agreement, cast in person at
a meeting called for the purpose of voting on such approval, and (b) by the
Fund's Board of Directors or by vote of a majority of the outstanding voting
securities of the Fund. Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by the Fund (by vote
of the Fund's Board of Directors or by vote of a majority of the outstanding
voting securities of the Fund), or by the Manager on sixty days' written notice.
This Agreement will immediately and automatically terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" shall have the same
meaning of such terms in the 1940 Act.)
12. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be amended 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. No amendment of this Agreement shall be
effective until approved in accordance with the requirements of the 1940 Act.
13. MISCELLANEOUS. Any notice made pursuant to this Agreement
shall be given in writing, addressed and delivered or mailed postage prepaid,
return-receipt requested, to the other party to this Agreement at its principal
place of business. Notice given by a party's attorney shall be deemed to be
notice given by the party. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provisions 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 and shall be
governed by Maryland law.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
CHARTWELL DIVIDEND AND INCOME
FUND, INC.
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Authorized Officer
CHARTWELL INVESTMENT PARTNERS, L.P.
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Authorized Officer
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