99.5(c)
Advisory Agreement between Capital Growth Management and the Registrant.
ADVISORY AGREEMENT
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AGREEMENT made this 1st day of September, 1993 by and between NEW ENGLAND
ZENITH FUND, a Massachusetts business trust (the "Fund") with respect to its
CAPITAL GROWTH SERIES (the "Series"), and CAPITAL GROWTH MANAGEMENT LIMITED
PARTNERSHIP, a Massachusetts partnership (the "Adviser").
WITNESSETH:
WHEREAS, the Fund and the Adviser wish to enter into an agreement setting
forth the terms upon which the Adviser will perform certain services for the
Fund;
NOW THEREFORE, in consideration of the premises and covenants hereinafter
contained, the parties agree as follows:
I. The Fund hereby employs the Adviser to manage the investment and
reinvestment of the assets belonging to the Series and to perform the other
services herein set forth, subject to the supervision and control of the Board
of Trustees of the Fund. The Adviser hereby accepts such employment and agrees,
at its own expense, to render the services and to assume the obligations herein
set forth, for the compensation herein provided. The Adviser shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of the Fund.
I. In carrying out its obligations to manage the investment and
reinvestment of the assets belonging to the Series, the Adviser shall:
A. obtain and evaluate such economic, statistical and financial
data and information and undertake such additional investment research as
it shall believe necessary or advisable for the management of the
investment and reinvestment of the assets belonging to the Series in
accordance with the Series' investment objective and policies;
A. take such steps as are necessary to implement the investment
policies of the Series (and to ensure compliance by the Series with
applicable state insurance laws governing permissible investments) by
purchase and sale of securities, including the placing of orders for such
purchase and sale; and
A. regularly report to the Board of Trustees with respect to the
implementation of the investment policies of the Series.
I. All activities in connection with the management of the affairs of
the Series undertaken by the Adviser pursuant to this Agreement shall at all
times be subject to the supervision and control of the Board of Trustees, any
duly constituted committee thereof or any officer of the Fund acting pursuant to
like authority.
I. In addition to performing at its expense the obligations set forth in
section 2 hereof, the Adviser shall furnish to the Fund at the Adviser's own
expense or pay the expenses of the Fund for the following:
A. office space in such place or places as may be agreed upon from
time to time, and all necessary office supplies, facilities and equipment;
A. necessary executive and other personnel for managing the
affairs of the Series, including personnel to perform clerical,
bookkeeping, accounting, stenographic and other office functions (exclusive
of those related to and to be performed under contract for custodial,
transfer, dividend and plan agency services by the bank selected to perform
such services);
A. compensation, if any, of Trustees of the Fund who are
directors, officers, partners or employees of the Adviser or any affiliated
person (other than a registered investment company) of the Adviser; and
A. all services, other than services of counsel, required in
connection with the preparation of registration statements and
prospectuses, including amendments and revisions thereto, all annual,
semiannual and periodic reports, and notices and proxy solicitation
material furnished to shareholders of the Fund or regulatory authorities,
to the extent that any such materials relate to the business of the Series,
to the shareholders thereof or otherwise to the Series, the Series to be
treated for these purposes as a separate legal entity and fund.
I. Nothing in section 4 hereof shall require the Adviser to bear, or to
reimburse the Fund for:
A. any of the costs of printing and mailing the items referred to
in sub-section (d) of section 4;
A. any of the costs of preparing, printing and distributing sales
literature;
A. compensation of Trustees of the Fund who are not officers,
directors, partners or employees of the Adviser or of any affiliated person
(other than a registered investment company) of the Adviser;
A. registration, filing and other fees in connection with
requirements of regulatory authorities;
A. the charges and expenses of any Custodian appointed by the Fund
for custodial, paying agent, transfer agent and plan agent services;
A. charges and expenses of independent accountants retained by the
Fund;
A. charges and expenses of any transfer agents and registrars
appointed by the Fund;
A. brokers' commissions and issue and transfer taxes chargeable to
the Fund in connection with securities transactions to which the Fund is a
party;
A. taxes and fees payable by the Fund to federal, state or other
governmental agencies;
A. any cost of certificates representing shares of the Fund;
A. legal fees and expenses in connection with the affairs of the
Fund including registering and qualifying its shares with federal and state
regulatory authorities;
A. expenses of meetings of shareholders and Trustees of the Fund;
and
A. interest, including interest on borrowings by the Fund.
A. The services of the Adviser to the Fund hereunder are not to be
deemed exclusive and the Adviser shall be free to render similar services to
others, so long as its services hereunder are not impaired thereby.
A. To better enable it to fulfill its obligations hereunder, the
Adviser has entered into a service agreement with New England Securities
Corporation under which the latter has agreed to furnish such office space for
the Fund and such clerical, bookkeeping, accounting, stenographic and
administrative personnel and services as the Adviser may reasonably request.
I. As full compensation for all services rendered, facilities furnished and
expenses borne by the Adviser hereunder, the Fund shall pay the Adviser
compensation at the annual rate of (a) .70% of the value of the net assets
belonging to the Series, as calculated below, up to $200 million, (b) .65% of
such value in excess of $200 million but less than or equal to $500 million and
(c) .60% of such value in excess of $500
million. Such compensation shall be payable monthly in arrears or at such other
intervals, not less frequently than quarterly, as the Board of Trustees of the
Fund may from time to time determine and specify in writing to the Adviser. Such
compensation shall be calculated on the basis of the average of all the
valuations of the net assets of the Series made as of the close of business on
each business day during the period for which such compensation is paid. The
Adviser hereby acknowledges that the Fund's obligation to pay such compensation
is binding only on the assets and property belonging to the Series.
I. If the total of all ordinary business expenses of the Series or the
Fund as a whole (including investment advisory fees but excluding taxes,
portfolio brokerage commissions and interest) for any fiscal year exceeds the
lowest applicable percentage of average net assets or income limitation
prescribed by any state in which shares of the Series are qualified for sale,
the total fee otherwise due the Adviser for such fiscal year pursuant to Section
7 hereof shall be reduced by the amount of such excess belonging to the Series,
and, if, after giving effect to such reduction, the total of all such ordinary
expenses continues to exceed any such applicable limitation, the Adviser shall
pay any such continuing excess belonging to the Series; provided, however, that
the Adviser will not reduce its fees nor pay any such expenses to an extent or
under circumstances which would result in the inability of the Fund or the
Series (if it were treated as a separate entity under the Internal Revenue Code
of 1986, as amended) to qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended. Solely for purposes of applying such
limitations in accordance with the foregoing sentence, the Series and the Fund
shall each be deemed to be a separate fund subject to such limitations. Should
the applicable state limitation provisions fail to specify how the average net
assets of the Fund or belonging to the Series are to be calculated, that figure
shall be computed in the manner described in section 7 above.
I. It is understood that any of the shareholders, trustees, officers,
employees and agents of the Fund may be a partner, shareholder, director,
officer, employee or agent of, or be otherwise interested in the Adviser, any
affiliated person of the Adviser, any organization in which the Adviser may have
an interest or any organization which may have an interest in the Adviser; that
the Adviser, any such affiliated person or any such organization may have an
interest in the Fund; and that the existence of any such dual interest shall not
affect the validity hereof or of any transactions hereunder except as otherwise
provided in the Agreement and Declaration of Trust of the Fund and the
Partnership Agreement of the Adviser, respectively, or by specific provisions of
applicable law.
I. This Agreement shall become effective as of the date of its
execution, and
A. unless otherwise terminated, this Agreement shall continue in
effect for two years from the date of execution, and from year to year
thereafter so long as such continuance is specifically approved at least
annually (i) by the Board of Trustees of the Fund or by vote of a majority
of the outstanding voting
securities of the Series, and (ii) by vote of a majority of the Trustees of
the Fund who are not interested persons of the Fund or the Adviser, cast in
person at a meeting called for the purpose of voting on such approval;
A. this Agreement may at any time be terminated on sixty days'
written notice to the Adviser either by vote of the Board of Trustees of
the Fund or by vote of a majority of the outstanding voting securities of
the Series;
A. this Agreement shall automatically terminate in the event of
its assignment;
A. this Agreement may be terminated by the Adviser on ninety days'
written notice to the Fund;
A. if New England Securities Corporation, the Fund's principal
underwriter, requires the Fund to change its name so as to eliminate all
references to the words "New England" pursuant to the provisions of the
Fund's Distribution Agreement or Distribution Agreements with said
corporation, then this Agreement shall automatically terminate at the time
of such change unless the continuance of this Agreement after such change
shall have been specifically approved by vote of a majority of the
outstanding voting securities of the Series and by vote of a majority of
the Trustees of the Fund who are not interested persons of the Fund or the
Adviser, cast in person at a meeting called for the purpose of voting on
such approval.
I. This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Fund shall have been
approved by vote of a majority of the outstanding voting securities of the
Series and by vote of a majority of the Trustees of the Fund who are not
interested persons of the Fund or the Adviser, cast in person at a meeting
called for the purpose of voting on such approval.
I. For the purpose of this Agreement, the terms "vote of a majority of
the outstanding voting securities", "interested person", "affiliated person" and
"assignment" shall have their respective meanings defined in the Investment
Company Act of 1940, subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission under said Act. References in this
Agreement to any assets, property or liabilities "belonging to" the Series shall
have the meaning defined in the Fund's Agreement and Declaration of Trust.
I. In the absence of willful misfeasance, bad faith or gross negligence
on the part of the Adviser, or reckless disregard of its obligations and duties
hereunder, the Adviser shall not be subject to any liability to the Fund, to any
shareholder of the Fund or to any other person, firm or organization, for any
act or omission in the course of, or connected with, rendering services
hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
NEW ENGLAND ZENITH CAPITAL GROWTH MANAGEMENT
FUND LIMITED PARTNERSHIP
By By
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A copy of the Agreement and Declaration of Trust establishing New England
Zenith Fund (the "Fund") is on file with the Secretary of State of The
Commonwealth of Massachusetts, and notice is hereby given that this Agreement is
executed with respect to the Fund's Capital Growth Series (the "Series") on
behalf of the Fund by officers of the Fund as officers and not individually and
that the obligations of or arising out of this Agreement are not binding upon
any of the Trustees, officers or shareholders individually but are binding only
upon the assets and property belonging to the Series.
