EX. 99.d(2)
INVESTMENT ADVISORY AGREEMENT
As Amended March 24, 2000
THIS AGREEMENT is made this 26th day of February, 1990 by and between
The Tocqueville Fund, a Massachusetts business trust (the "Fund") and
Tocqueville Asset Management L.P., a limited partnership (the "Investment
Adviser");
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Fund is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations promulgated thereunder;
and
WHEREAS, the Investment Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Investment Advisers
Act"), and engages in the business of acting as an investment adviser; and
WHEREAS, the Fund and the Investment Adviser desire to enter into an
agreement to provide for the management of the assets of the Fund on the terms
and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Management. The Investment Adviser shall act as investment
----------
adviser for the Fund and shall, in such capacity, supervise the investment and
reinvestment of the cash, securities or other properties comprising the Fund's
assets, subject at all times to the policies and control of the Fund's Board of
Trustees. The Investment Adviser shall give the Fund the benefit of its best
judgment, efforts and facilities in rendering its services as investment
adviser.
2. Duties of Investment Advisor. In carrying out its obligations
----------------------------
under paragraph 1 hereof, the Investment Adviser shall:
(a) supervise and manage all aspects of the Fund's operations;
(b) provide the Fund or obtain for it, and thereafter supervise,
such executive, administrative, clerical and shareholder servicing services as
are deemed advisable by the Fund's Board of Trustees;
(c) arrange, but not pay for, the periodic updating of
prospectuses and supplements thereto, proxy material, tax returns, reports to
the Fund's shareholders and reports to and filings with the Securities and
Exchange Commission, and state Blue Sky authorities;
(d) provide the Fund with, or obtain for it, adequate office
space and all necessary office equipment and services, including telephone
service, heat, utilities, stationery supplies and similar items for the Fund's
principal office;
(e) provide the Board of Trustees of the Fund on a regular basis
with financial reports and analyses on the Fund's operations and the operations
of comparable investment companies;
(f) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or the Fund, and whether
concerning the individual issuers whose securities are included in the Fund or
the activities in which they engage, or with respect to securities which the
Investment Adviser considers desirable for inclusion in the Fund;
(g) determine what issuers and securities shall be represented
in the Fund's portfolio and regularly report them to the Board of Trustees;
(h) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers and regularly report
thereon to the Board of Trustees; and
(i) take, on behalf of the Fund, all actions which appear to the
Fund necessary to carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including the placing of orders for the
purchase and sale of portfolio securities.
3. Broker-Dealer Relationships. The Investment Adviser is
---------------------------
responsible for decisions to buy and sell securities for the Fund, broker-dealer
selection, and negotiation of brokerage commission rates. The Investment
Adviser's primary consideration in effecting a security transaction will be
execution at a price that is reasonable and fair compared to the commission, fee
or other remuneration received or to be received by other brokers in connection
with comparable transactions including similar securities being purchased or
sold on a securities exchange during a comparable period of time.
In selecting a broker-dealer to execute each particular transaction,
the Investment Adviser will take the following into consideration: the best net
price available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-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-dealer
if the difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies and procedures as the Board
of Trustees may determine, the Investment Adviser 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 the Investment Adviser
for the Fund's use 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 the Investment Adviser
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 the
Investment Adviser's overall responsibilities with respect to the Fund. The
Investment Adviser is further authorized to allocate the orders placed by it on
behalf of the Fund to such brokers and dealers who also provide research or
statistical material, or other services to the Fund or the Investment Adviser
for the Fund's use. Such allocation shall be in such amounts and proportions as
the Investment Adviser shall determine and the Investment Adviser 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.
4. Control by Board of Trustees. Any investment program undertaken
----------------------------
by the Investment Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Investment Adviser on behalf of the Fund pursuant
thereto, shall at all times be subject to any directives of the Board of
Trustees of the Fund.
5. Compliance with Applicable Requirements. In carrying out its
---------------------------------------
obligations under this Agreement, the Investment Adviser shall at all times
conform to:
(a) all applicable provisions of the Investment Company Act and
the Investment Advisers Act and any rules and regulations adopted thereunder as
amended; and
2
(b) the provisions of the Registration Statements of the Fund
under the Securities Act of 1933 and the Investment Company Act; and
(c) the provisions of the Declaration of Trust of the Fund, as
amended; and
(d) the provisions of the By-laws of the Fund, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Fund shall be allocable
--------
between the Fund and the Investment Adviser as follows:
(a) The Investment Adviser shall furnish, at its expense and
without cost to the Fund, the services of a President, Secretary and one or more
Vice Presidents of the Fund, to the extent that such additional officers may be
required by the Fund for the proper conduct of its affairs.
(b) The Investment Adviser shall further maintain, at its
expense and without costs to the Fund, a trading function in order to carry out
its obligations under subparagraph (i) of paragraph 2 hereof to place orders for
the purchase and sale of portfolio securities for the Fund.
(c) Nothing in subparagraph (a) hereof shall be construed to
require the Investment Adviser to bear:
(i) any of the costs (including applicable office space,
facilities and equipment) of the services of a principal financial
officer of the Fund whose normal duties consist of maintaining the
financial accounts and books and records of the Fund; including the
reviewing of calculations of net asset value and preparing tax
returns; or
(ii) any of the costs (including applicable office space,
facilities and equipment) of the services of any of the personnel
operating under the direction of such principal financial officer.
Notwithstanding the obligation of the Fund to bear the expense of the
functions referred to in clauses (i) and (ii) of this subparagraph
(c), the Investment Adviser may pay the salaries, including any
applicable employment or payroll taxes and other salary costs, of the
principal financial officer and other personnel carrying out such
functions and the Fund shall reimburse the Investment Adviser therefor
upon proper accounting.
(d) All of the ordinary business expenses incurred in the
operations of the Fund and the offering of its shares shall be borne by the Fund
unless specifically provided otherwise in this paragraph 6. These expenses
include but are not limited to brokerage commissions, legal, auditing, taxes or
governmental fees, the cost of preparing share certificates, custodian,
depository, transfer and shareholder service agent costs, expenses of issue,
sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, insurance premiums on property or personnel
(including officers and trustees if available) of the Fund which inure to its
benefit, expenses relating to trustee and shareholder meetings, the cost of
preparing and distributing reports and notices to shareholders, the fees and
other expenses incurred by the Fund in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to shareholders.
7. Delegation of Responsibilities. The Investment Adviser may
------------------------------
delegate the performance of certain administrative services for the Fund to
Freedom Capital Management Corp. ("Freedom") pursuant to an administration
agreement, or to one or more administrators approved by the Board of Trustees,
but such delegation will not relieve the Investment Adviser of the duty to
supervise the performance of administrative services hereunder. If the
administrative functions are delegated to Freedom, then the obligations of
Freedom shall be governed by the Administration Agreement between the Investment
Adviser and Freedom dated February 26, 1990. The Investment
3
Adviser shall conduct the Fund's relations with Freedom and, in connection
therewith, shall be responsible for providing in a timely and accurate fashion
all information and data maintained by the Investment Adviser on behalf of the
Fund necessary for Freedom to perform its obligations under the Administration
Agreement.
Upon the request of the Fund's Board of Trustees, the Investment
Adviser may perform services on behalf of the Fund which are not required by
this Agreement. Such services will be performed on behalf of the Fund and the
Investment Adviser's cost in rendering such services may be billed monthly to
the Fund, subject to examination by the Fund's independent accountants. Payment
or assumption by the Investment Adviser of any Fund expense that the Investment
Adviser is not required to pay or assume under this Agreement shall not relieve
the Investment Adviser of any of its obligations to the Fund nor obligate the
Investment Adviser to pay or assume any similar Fund expense on any subsequent
occasion.
8. Compensation. The Fund shall pay the Investment Adviser in full
------------
compensation for services rendered hereunder an annual investment advisory fee,
payable monthly, of .75% of the Fund's average daily net assets on the first
$500 million and .65% of the Fund's average daily net assets in excess of $500
million. The average daily net asset value of the Fund shall be determined in
the manner set forth in the Declaration of Trust and Prospectus of the Fund.
9. Expense Limitation. If, for any fiscal year, the total of all
------------------
ordinary business expenses of the Fund, including all investment advisory fees
but excluding brokerage commissions and fees, taxes, interest and extraordinary
expenses such as litigation, would exceed the most restrictive expense limits
imposed by any statute or regulatory authority of any jurisdiction in which
shares of the Fund are offered for sale, the investment advisory fee shall be
reduced by the amount of such excess. The amount of any such reduction to be
borne by the Investment Adviser shall be deducted from the monthly investment
advisory fee otherwise payable to the Investment Adviser during such fiscal
year; and if such amount should exceed such monthly fee, the Investment Adviser
agrees to pay to the Fund such excess expenses no later than the last day of the
first month of the next succeeding fiscal year. For the purposes of this
paragraph, the term "fiscal year" shall exclude the portion of the current
fiscal year which shall have elapsed prior to the date hereof and shall include
the portion of the then current fiscal year which shall have elapsed at the date
of termination of this Agreement.
10. Non-Exclusivity. The services of the Investment Adviser to the
---------------
Fund are not to be deemed to be exclusive, and the Investment Adviser shall be
free to render investment advisory and corporate administrative or other
services to others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers or Partners of the
Investment Adviser may serve as officers or trustees of the Fund, and that
officers or trustees of the Fund may serve as officers or partners of the
Investment Adviser to the extent permitted by law; and that the officers and
partners of the Investment Adviser are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers or partners of any other firm or corporation,
including other investment companies.
11. Term and Approval. This Agreement shall become effective at the
-----------------
close of business on the date hereof and shall remain in force and effect for
two years and thereafter from year to year, provided that such continuance is
specifically approved at least annually:
(a) (i) by the Fund's Board of Trustees or (ii) by the vote of a
majority of the Fund's outstanding voting securities (as defined in Section 2(a)
(42) of the Investment Company Act); and
(b) by the affirmative vote of a majority of the Trustees who
are not parties to this Agreement or interested persons of a party to this
Agreement (other than as Fund trustees), by votes cast in person at a meeting
specifically called for such purpose.
4
12. Termination. This Agreement may be terminated at any time,
-----------
without the payment of any penalty, by vote of the Fund's Board of Trustees or
by vote of a majority of the Fund's outstanding voting securities, or by the
Investment Adviser, on sixty (60) days' written notice to the other party. The
Notice provided for herein may be waived by either party. This Agreement shall
automatically terminate in the event of its assignment, the term "assignment"
for the purpose having the meaning defined in Section 2(a)(4) of the Investment
Company Act.
13. Liability of Investment Adviser and Indemnification. In the
---------------------------------------------------
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Investment
Adviser or any of its officers, trustees or employees, it shall not be subject
to liability to the Fund or to any shareholder of the Fund for any omission in
the course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
14. Liability of Trustees and Shareholders. A copy of the Agreement
--------------------------------------
and Declaration of Trust of the Fund is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that this instrument
is executed on behalf of the trustees of the Fund as trustees and not
individually and that the obligations of this instrument are not binding upon
any of the trustees or shareholders individually but are binding only upon the
assets and property of the Fund.
15. 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. Until
further notice to the other party, it is agreed that the address of the Fund and
that of the Investment Adviser shall be 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
16. 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 Investment Company Act 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 Investment Company Act reflected in any
provision of this Agreement is released by rules, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in duplicate by their respective officers on the day and year first
above written.
THE TOCQUEVILLE FUND
Attest: By /s/ Xxxxxx Xxxxxxxxxxxx
-------------------------------------
Xxxxxx Xxxxxxxxxxxx
/s/ Xxxxxx X. Xxxx
-------------------
Xxxxxx X. Xxxx TOCQUEVILLE ASSET MANAGEMENT L.P.
Attest: By /s/ Xxxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxxxx Xxxx
-------------------
Xxxxxxxx Xxxx
5
