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EXHIBIT 99.2(G)(2)
INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE XXXXXXXX GLOBAL EQUITY FUND
AND
XXXXXXXX ASSET MANAGEMENT, INC.
INVESTMENT ADVISORY AGREEMENT, dated as of ________, 1997, by
and between THE XXXXXXXX GLOBAL EQUITY FUND, a Delaware business trust (the
"Fund"), and XXXXXXXX ASSET MANAGEMENT, INC. ( "Xxxxxxxx").
W I T N E S S E T H
WHEREAS, the Fund is engaged in business as a closed-end
investment company registered under the Investment Company Act of 1940
(collectively with the rules and regulations promulgated thereunder, the "Act");
and
WHEREAS, Xxxxxxxx is an investment adviser under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment adviser; and
WHEREAS, the Fund wishes to engage Xxxxxxxx to provide certain
investment advisory services for the Fund, and Xxxxxxxx is willing to provide
such services for the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is hereby agreed by and between the
parties hereto as follows:
1. Appointment.
Xxxxxxxx agrees, all as more fully set forth herein, to act as
investment adviser to the Fund with respect to the investment of its assets and
to supervise and arrange the purchase of securities for and the sale of
securities held in that portion of the portfolio allocated to it by the Asset
Allocation Committee of the Fund.
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2. Asset Allocation Committee
The Asset Allocation Committee shall allocate the assets of
the Fund among the markets in which the Fund will invest. Assets allocated by
the Committee to North America and Western Europe will be managed by Xxxxxxxx
(the "Xxxxxxxx Portfolio"). Assets allocated to Asia and Japan will be managed
by Guinness Flight Investment Management Company (the "Adviser"). The Committee
will consist of three members of which two members shall be representatives of
Xxxxxxxx and one member shall be a representative of the Adviser. All decisions
by the Committee shall be made by a majority vote of its members.
3. Duties and Obligations of Xxxxxxxx With Respect
to the Investment of Assets of the Fund.
(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Trustees of the Fund,
Xxxxxxxx shall:
(i) monitor continuously the investment program
of the Fund and the composition of its
portfolio;
(ii) determine what securities shall be purchased
or sold for the Xxxxxxxx Portfolio;
(iii) arrange for the purchase and the sale of
securities held in the Xxxxxxxx Portfolio of
the Fund; and
(iv) provide information to the Board of Trustees
regarding the Xxxxxxxx Portfolio.
(b) Any services furnished by Xxxxxxxx under this section
shall at all times conform to, and be in accordance with, any requirements
imposed by:
(i) the provisions of the Act;
(ii) any other applicable provisions of state and
Federal law;
(iii) the provisions of the Fund's Declaration of
Trust and By-Laws, as amended from time to
time;
(iv) any policies and determinations of the Board
of Trustees of the Fund; and
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(v) the fundamental policies of the Fund, as
reflected in its Registration Statement
under the Act, as amended from time to time.
(c) Xxxxxxxx shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder, and in connection therewith
Xxxxxxxx shall not be liable to the Fund or its security holders 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 execution of portfolio transactions for the Fund,
except for wilful 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 subsection (c), the term "Xxxxxxxx" shall include
board members, officers and employees of Xxxxxxxx as well as the entity referred
to as the "Xxxxxxxx" itself.
(d) Nothing in this Agreement shall prevent Xxxxxxxx or any
affiliated person (as defined in the Act) of Xxxxxxxx from acting as investment
adviser or manager for any other person, firm or corporation (including other
investment companies) and shall not in any way limit or restrict Xxxxxxxx or any
such affiliated person from buying, selling or trading any securities for its or
their own accounts or for the accounts of others for whom it or they may be
acting; provided, however, that Xxxxxxxx expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Fund under this Agreement. Xxxxxxxx agrees
that it will not deal with itself, or with the Trustees of the Fund or the
Fund's principal underwriter or distributor, as principals in making purchases
or sales of securities or other property for the account of the Fund, except as
permitted by the Act, and will comply with all other provisions of the Fund's
Declaration of Trust and By-Laws and the then-current prospectus and statement
of additional information applicable to the Fund relative to Xxxxxxxx and its
board members and officers.
(e) The Fund will supply Xxxxxxxx with certified copies of the
following documents: (i) the Fund's Declaration of Trust and By-Laws, as
amended; (ii) resolutions of the Fund's Board of Trustees and shareholders
authorizing the appointment of Xxxxxxxx and approving this Agreement; (iii) the
Fund's Registration Statement, as filed with the Securities and Exchange
Commission; and (iv) the Fund's most recent prospectus and statement of
additional information. The Fund will furnish Xxxxxxxx promptly with copies of
all amendments or supplements to the foregoing, if any, and all documents,
notices and reports filed with the Securities and Exchange Commission.
(f) The Fund will supply, or cause its custodian bank to
supply, to Xxxxxxxx such financial information as is necessary or desirable for
the functions of Xxxxxxxx hereunder.
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4. Broker-Dealer Relationships.
Xxxxxxxx is responsible for decisions to buy and sell
securities for the Xxxxxxxx Portfolio of the Fund, broker-dealer selection and
negotiation of its brokerage commission rates. Xxxxxxxx'x primary consideration
in effecting a security transaction will be execution at the most favorable
price. The Fund understands that many of the Fund's portfolio transactions will
be transacted with primary market makers acting as principal on a net basis,
with no brokerage commissions being paid by the Fund. Such principal
transactions may, however, result in a profit to the market makers. In certain
instances, Xxxxxxxx may make purchases of underwritten issues at prices which
include underwriting fees. In selecting a broker or dealer to execute each
particular transaction, Xxxxxxxx will take the following into consideration: the
best price available; the reliability, integrity and financial condition of the
broker or dealer; the size of and difficulty in executing the order; and the
value of the expected contribution of the broker or dealer to the investment
performance of the Fund on a continuing basis. Accordingly, the price to the
Fund in any transaction may be less favorable than that available from another
broker or dealer if the difference is reasonably justified by other aspects of
the portfolio execution services offered. Subject to such policies as the Board
of Trustees may determine, Xxxxxxxx shall not be deemed to have acted unlawfully
or to have breached any duty created by this Agreement or otherwise solely by
reason of its having caused the Fund to pay a broker or dealer that provides
brokerage and research services to Xxxxxxxx an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction, if Xxxxxxxx determines in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or Xxxxxxxx'x overall responsibilities with respect to the Fund.
Xxxxxxxx is further authorized to allocate the orders placed by it on behalf of
the Fund to an affiliated broker-dealer, if any, or to such brokers and dealers
who also provide research or statistical material, or other services to the Fund
(which material or services may also assist Xxxxxxxx in rendering services to
other clients). Such allocation shall be in such amounts and proportions as
Xxxxxxxx shall determine and Xxxxxxxx will report on said allocations regularly
to the Board of Trustees of the Fund indicating the brokers to whom such
allocations have been made and the basis therefor.
5. Allocation of Expenses.
Xxxxxxxx agrees that it will furnish the Fund, at its expense,
all office space and facilities, equipment and clerical personnel necessary for
carrying out its duties under this Agreement. Xxxxxxxx agrees that it will
supply to the Administrator of the Fund all necessary financial information in
connection with the Administrator's duties under any agreement between the
Administrator and the Fund on behalf of the Fund. All costs and expenses
associated with any administrative functions delegated by Xxxxxxxx to the
Administrator that are not pursuant to any agreement between the Administrator
and the Fund or Xxxxxxxx and the Fund will be paid by Xxxxxxxx. All other costs
and expenses not expressly assumed by Xxxxxxxx under this Agreement, by the
Adviser under its Investment Advisory Agreement with the Fund or by the
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Administrator under the Administration Agreement between it and the Fund on
behalf of the Fund shall be paid by the Fund from the assets of the Fund,
including, but not limited to (i) fees paid to Xxxxxxxx, the Adviser and the
Administrator; (ii) interest and taxes; (iii) brokerage commissions; (iv)
insurance premiums; (v) compensation and expenses of the trustees other than
those affiliated with Xxxxxxxx, the Adviser or the Administrator; (vi) legal,
accounting and audit expenses; (vii) fees and expenses of any transfer agent,
distributor, registrar, dividend disbursing agent or shareholder servicing agent
of the Fund; (viii) expenses, including clerical expenses, incident to the
issuance, redemption or repurchase of shares of the Fund, including issuance on
the payment of, or reinvestment of, dividends; (ix) fees and expenses incident
to the registration under Federal or state securities laws of the Fund or its
shares; (x) expenses of preparing, setting in type, printing and mailing
prospectuses, statements of additional information, reports and notices and
proxy material to shareholders of the Fund; (xi) all other expenses incidental
to holding meetings of the Fund's trustees and shareholders; (xii) expenses
connected with the execution, recording and settlement of portfolio securities
transactions; (xiii) fees and expenses of the Fund's custodian for all services
to the Fund, including safekeeping of funds and securities and maintaining
required books and accounts; (xiv) expenses of calculating net asset value of
the shares of the Fund; (xv) industry membership fees allocable to the Fund; and
(xvi) such extraordinary expenses as may arise, including litigation affecting
the Fund and the legal obligations which the Fund may have to indemnify the
officers and directors with respect thereto.
6. Compensation of Xxxxxxxx.
For the services to be rendered, the Fund shall pay to
Xxxxxxxx from the assets of the Fund an investment advisory fee paid monthly at
an annual rate equal to .60% of the Fund's average weekly net assets for the
Fund's then-current fiscal year. Except as hereinafter set forth, compensation
under this Agreement shall be calculated and accrued daily and the amounts of
the daily accruals shall be paid monthly. If the 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 pro rated in a manner consistent with the calculation of the fees as
set forth above. Payment of Xxxxxxxx'x compensation for the preceding month
shall be made within five days after the end of that month.
7. Duration, Amendment and Termination.
(a) This Agreement shall go into effect as to the Fund on the
date set forth above (the "Effective Date") and shall, unless terminated as
hereinafter provided, continue in effect for two years from the Effective Date
and shall continue from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the Board of Trustees
of the Fund, including the vote of a majority of the trustees who are not
parties to this Agreement or "interested persons" (as defined in the Act) of any
such party cast in person at a meeting called for the purpose of voting on such
approval, or by the vote of the holders of a "majority"
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(as so defined) of the outstanding voting securities of the Fund and by such a
vote of the trustees.
(b) This Agreement may be amended only if such amendment is
approved by the vote of the holders of a "majority" (as defined in the Act) of
the outstanding voting securities of the Fund.
(c) This Agreement may be terminated by Xxxxxxxx at any time
without penalty upon giving the Fund sixty (60) days' written notice (which
notice may be waived by the Fund) and may be terminated by the Fund at any time
without penalty upon giving Xxxxxxxx sixty (60) days' written notice (which
notice may be waived by Xxxxxxxx), provided that such termination by the Fund
shall be approved by the vote of a majority of all the trustees in office at the
time or by the vote of the holders of a "majority" (as defined in the Act) of
the voting securities of the Fund at the time outstanding and entitled to vote.
This Agreement shall automatically terminate in the event of its "assignment"
(as defined in the Act).
8. Board of Trustees' Meeting.
The Fund agrees that notice of each meeting of the Board of
Trustees of the Fund will be sent to Xxxxxxxx and that the Fund will make
appropriate arrangements for the attendance (as persons present by invitation)
of such person or persons as Xxxxxxxx may designate.
9. Name.
The Fund hereby acknowledges that any and all rights in or to
the name "Xxxxxxxx" which exist on the date of this Agreement or which may arise
hereafter are, and under any and all circumstances shall continue to be, the
sole property of Xxxxxxxx; that Xxxxxxxx may assign any or all of such rights to
another party or parties without the consent of the Fund; and that Xxxxxxxx may
permit other parties, including other investment companies, to use the word
"Xxxxxxxx" in their names. If Xxxxxxxx, or its assignee as the case may be,
ceases to serve as an adviser to the Fund, the Fund hereby agrees to take
promptly any and all actions which are necessary or desirable to change its name
and the name of the Fund so as to delete the word "Xxxxxxxx".
10. Notices.
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice.
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11. Questions of Interpretation.
Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from a term or
provision of the Act, as amended, shall be resolved by reference to such term or
provision of the Act and to interpretations thereof, if any, by the United
States Courts or in the absence of any controlling decision of any such court,
by rules, regulations or orders of the Securities and Exchange Commission issued
pursuant to said Act. In addition, where the effect of a requirement of the Act,
reflected in any provision of this Agreement, is revised by rule, regulation or
order of the Securities and Exchange Commission, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
12. This Agreement shall be construed in accordance with
the laws of the State of New York, without regard to the conflicts of law
provisions thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
THE XXXXXXXX GLOBAL EQUITY FUND
By____________________________________________________
Title:
XXXXXXXX ASSET MANAGEMENT, INC.
By____________________________________________________
Title:
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