Exhibit (k)(3)
XXXXX XXXXX TAX-ADVANTAGED DIVIDEND INCOME FUND
ADMINISTRATION AGREEMENT
AGREEMENT made this 11th day of August, 2003, between Xxxxx Xxxxx
Tax-Advantaged Dividend Income Fund, a Massachusetts business trust (the
"Fund"), and Xxxxx Xxxxx Management, a Massachusetts business trust (the
"Administrator").
1. DUTIES OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to act as administrator for and to administer the affairs of the
Fund, subject to the supervision of the Trustees of the Fund for the period and
on the terms set forth in this Agreement.
The Administrator hereby accepts such employment, and agrees to
administer the Fund's business affairs and, in connection therewith, to furnish
for the use of the Fund office space and all necessary office facilities,
equipment and personnel for administering the affairs of the Fund. The
Administrator shall also pay the salaries and compensation of all officers and
Trustees of the Fund who are members of the Administrator's organization and who
render executive and administrative services to the Fund, and the salaries and
compensation of all other personnel of the Administrator performing management
and administrative services for the Fund. The Administrator shall for all
purposes herein be deemed to be an independent contractor and shall, except as
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.
In connection with its responsibilities as Administrator of the Fund,
the Administrator (i) will assist in preparing all annual, semi-annual and other
reports required to be sent to Fund shareholders, and arrange for the printing
and dissemination of such reports to shareholders; (ii) will prepare and
assemble all reports required to be filed by the Fund with the Securities and
Exchange Commission ("SEC") on Forms N-SAR and N-CSR, or on such other form as
the SEC may substitute for Form N-SAR or N-CSR, and file such reports with the
SEC; (iii) will review the provision of services by the Fund's independent
accountants, including, but not limited to, the preparation by such accountants
of audited financial statements of the Fund and the Fund's federal, state and
local tax returns; and make such reports and recommendations to the Trustees of
the Fund concerning the performance of the independent accountants as the
Trustees deem appropriate; (iv) will arrange for the filing with the appropriate
authorities all required federal, state and local tax returns; (v) will arrange
for the dissemination to shareholders of the Fund's proxy materials, and will
oversee the tabulation of proxies by the Fund's transfer agent or other duly
authorized proxy tabulator; (vi) will review and supervise the provision of
custodian services to the Fund; and make such reports and recommendations to the
Trustees concerning the provision of such services as the Trustees deem
appropriate; (vii) will value all such portfolio investments and other assets of
the Fund as may be designated by the Trustees (subject to any guidelines,
directions and instructions of the Trustees), and review and supervise the
calculation of the net asset value of the Fund's shares by the custodian; (viii)
will negotiate the terms and conditions under which transfer agency and dividend
disbursing services will be provided to the Fund, and the fees to be paid by the
Fund in connection therewith; review and supervise the provision of transfer
agency and dividend disbursing services to the Fund; and make such reports and
recommendations to the Trustees concerning the performance of the Fund's
transfer and dividend disbursing agent as the Trustees deem appropriate; (ix)
will establish the accounting policies of the Fund; reconcile accounting issues
which may arise with respect to the Fund's operations; and consult with the
Fund's independent accountants, legal counsel, custodian, accounting and
bookkeeping agents and transfer and dividend disbursing agent as necessary in
connection therewith; (x) will determine the amount of all distributions to be
paid by the Fund to its shareholders; prepare and arrange for the printing of
notices to shareholders regarding such distributions and provide the Fund's
transfer and dividend disbursing agent and custodian with such information as is
required for such parties to effect the payment of distributions and to
implement the Fund's dividend reinvestment plan; (xi) will review the Fund's
bills and authorize payments of such bills by the Fund's custodian; (xii) will
make recommendations to the Trustees as to whether the Fund should make
repurchase or tender offers for its own shares; arrange for the preparation and
filing of all documents required to be filed by the Fund with the SEC; arrange
for the preparation and dissemination of all appropriate repurchase or tender
offer documents and papers on behalf of the Fund; and supervise and conduct the
Fund's periodic repurchase or tender offers for its own shares; (xiii) monitor
any variance between the market value and net asset value per share, and
periodically report to the Trustees available actions that may conform such
values; (xiv) monitor the activities of any shareholder servicing agent retained
by the Administrator and periodically report to the Trustees about such
activities; (xv) will arrange for the preparation and filing of all other
reports, forms, registration statements and documents required to be filed by
the Fund with the SEC, the National Association of Securities Dealers, Inc. and
any securities exchange where Fund shares are listed; and (xvi) will provide to
the Fund such other internal legal, auditing and accounting services and
internal executive management and administrative services as the Trustees deem
appropriate to conduct the Fund's business affairs.
Notwithstanding the foregoing, the Administrator shall not be deemed to
have assumed any duties with respect to, and shall not be responsible for, the
management of the Fund's assets or the rendering of investment advice and
supervision with respect thereto or the distribution of shares of the Fund, nor
shall the Administrator be deemed to have assumed or have any responsibility
with respect to functions specifically assumed by any transfer agent, custodian
or shareholder servicing agent of the Fund.
SUB-ADMINISTRATORS. The Administrator may employ one or more
sub-administrators from time to time to perform such of the acts and services of
the Administrator and upon such terms and conditions as may be agreed upon
between the Administrator and such sub-administrators and approved by the
Trustees of the Fund.
2. COMPENSATION OF THE ADMINISTRATOR. The Board of Trustees of the Fund
have currently determined that, based on the current level of compensation
payable to Xxxxx Xxxxx Management by the Fund under the Fund's present
Investment Advisory Agreement with Xxxxx Xxxxx Management, the Administrator
shall receive no compensation from the Fund in respect of the services to be
rendered and the facilities to be provided by the Administrator under this
Agreement. If the Trustees subsequently determine that the Fund should
compensate the Administrator for such services and facilities, such compensation
shall be set forth in a new agreement or in an amendment to this Agreement to be
entered into by the parties hereto.
3. ALLOCATION OF CHARGES AND EXPENSES. It is understood that the Fund
will pay all its expenses other than those expressly stated to be payable by the
Administrator hereunder, which expenses payable by the Fund shall include,
without implied limitation, (i) expenses of maintaining the Fund and continuing
its existence; (ii) registration of the Fund under the Investment Company Act of
1940; (iii) commissions, fees and other expenses connected with the acquisition,
holding and disposition of securities and other investments; (iv) auditing,
accounting and legal expenses; (v) taxes and interest; (vi) governmental fees;
(vii) expenses of repurchase and redemption (if any) of shares, including all
expenses incurred in conducting repurchase and tender offers for the purpose of
repurchasing Fund shares; (viii) expenses of registering and qualifying the Fund
and its shares under federal and state securities laws and of preparing
registration statements and amendments for such purposes; (ix) expenses of
reports and notices to shareholders and of meetings of shareholders and proxy
solicitations therefor; (x) expenses of reports to governmental officers and
commissions; (xi) insurance expenses; (xii) association membership dues; (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Fund (including without limitation safekeeping of funds and
securities, keeping of books and accounts and determination of net asset value);
(xiv) fees, expenses and disbursements of transfer agents, dividend disbursing
agents, shareholder servicing agents and registrars for all services to the
Fund; (xv) expenses of listing shares with a stock exchange; (xvi) any direct
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charges to shareholders approved by the Trustees of the Fund; (xvii)
compensation of and any expenses of Trustees of the Fund who are not members of
the Administrator's organization; (xviii) all payments to be made and expenses
to be assumed by the Fund in connection with the distribution of Fund shares;
(xix) any pricing and valuation services employed by the Fund; (xx) any
investment advisory fee payable to an investment adviser; (xxi) all expenses
incurred in connection with leveraging the Fund's assets through a line of
credit, or issuing and maintaining preferred shares; and (xxii) such
non-recurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and obligations of the Fund to indemnify its
shareholders, Trustees, officers and employees with respect thereto.
4. OTHER INTERESTS. It is understood that Trustees, officers and
shareholders of the Fund are or may be or become interested in the Administrator
as trustees, officers, employees, shareholders or otherwise and that trustees,
officers, employees and shareholders of the Administrator are or may be or
become similarly interested in the Fund, and that the Administrator may be or
become interested in the Fund as a shareholder or otherwise. It is also
understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
employees, stockholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) that the Administrator may
organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Administrator or its subsidiaries or affiliates may enter into
advisory, management or administration agreements or other contracts or
relationship with such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The services of the
Administrator to the Fund are not to be deemed to be exclusive, the
Administrator being free to render services to others and engage in other
business activities. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Administrator, the Administrator shall not be subject to liability to the
Fund or to any shareholder of the Fund for any act or omission in the course of,
or connected with, rendering services hereunder or for any losses which may be
sustained in the acquisition, holding or disposition of any security or other
investment.
6. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect through and including
August 11, 2005 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after August 11, 2005 is
specifically approved at least annually (i) by the Board of Trustees of the
Fund, and (ii) by the vote of a majority of those Trustees of the Fund who are
not interested persons of the Administrator or the Fund.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement by action of the Trustees of the
Fund or the trustees of the Administrator, and the Fund may, at any time upon
such written notice to the Administrator, terminate the Agreement by vote of a
majority of the outstanding voting securities of the Fund. This Agreement shall
terminate automatically in the event of its assignment.
7. AMENDMENTS OF THE AGREEMENT. This Agreement may be amended by a
writing signed by both parties hereto, provided that no amendment to this
Agreement shall be effective until approved (i) by the vote of a majority of
those Trustees of the Fund who are not interested persons of the Administrator
or the Fund, and (ii) by vote of the Board of Trustees of the Fund.
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8. LIMITATION OF LIABILITY. Each party expressly acknowledges the
provision in the other party's Agreement and Declaration of Trust limiting the
personal liability of its shareholders officers, and Trustees, and each party
hereby agrees that it shall have recourse to the other party for payment of
claims or obligations as between the Fund and the Administrator arising out of
this Agreement and shall not seek satisfaction from the Trustees, officers or
shareholders of the other party.
9. USE OF THE NAME "XXXXX XXXXX." The Administrator hereby consents to
the use by the Fund of the name "Xxxxx Xxxxx" as part of the Fund's name;
provided, however, that such consent shall be conditioned upon the employment of
the Administrator or one of its affiliates as the administrator of the Fund. The
name "Xxxxx Xxxxx" or any variation thereof may be used from time to time in
other connections and for other purposes by the Administrator and its affiliates
and other investment companies that have obtained consent to the use of the name
"Xxxxx Xxxxx." The Administrator shall have the right to require the Fund to
cease using the name "Xxxxx Xxxxx" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Administrator or one of its affiliates as
the Fund's administrator. Future names adopted by the Fund for itself, insofar
as such names include identifying words requiring the consent of the
Administrator, shall be the property of the Administrator and shall be subject
to the same terms and conditions.
10. CERTAIN DEFINITIONS. The terms "assignment" and "interested
persons" when used herein shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote of the lesser of (a) 67 per
centum or more of the shares of the Fund present or represented by proxy at the
meeting if the holders of more than 50 per centum of the outstanding shares of
the Fund are present or represented by proxy at the meeting, or (b) more than 50
per centum of the outstanding shares of the Fund.
XXXXX XXXXX TAX-ADVANTAGED XXXXX XXXXX MANAGEMENT
DIVIDEND INCOME FUND
By: /s/ Xxxxxx X. Xxxxx Xx. By: /s/ Xxxx X. Xxxxxx
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President, and not Individually Vice President, and not Individually
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