ICON FUNDS
ADVISORY AGREEMENT
AGREEMENT made as of October 9, 1996 between MERIDIAN INVESTMENT
MANAGEMENT CORPORATION, a corporation organized under the laws of the State of
Colorado and having its principal place of business in Englewood, Colorado (the
"Adviser"), and ICON FUNDS, a Massachusetts business trust having its principal
place of business in Southlake, TX (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is registered under the Investment company Act of 1940
(the "1940 Act"); and
WHEREAS, the Adviser is engaged principally in the business of
rendering investment management services and is registered under the Investment
Advisers Act of 1940; and
WHEREAS, the Trust intends to initially offer shares in seventeen funds
[such series (the "Initial Funds") together with all other series subsequently
established by the Trust with respect to which the Trust desires to retain the
Adviser to render investment Advisory services hereunder the Adviser is willing
to do (collectively referred to as the "Funds")];
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. APPOINTMENT OF ADVISER.
(a) Initial Funds. The Trust hereby appoints the Adviser to act
as Adviser and Investment Adviser to each of the Initial Funds for the period
and on the terms herein set forth. The Adviser accepts such appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
(b) Additional Funds. In the event that the Trust establishes one
or more series of shares other than the Initial Funds with respect to which it
desires to retain the Adviser to render management and investment Advisory
services hereunder, it shall so notify the Adviser in writing, indicating the
Advisory fee which will be payable with respect to the additional series of
shares. If the Adviser is willing to render such services, it shall so notify
the Trust in writing, whereupon such series of shares shall become a Fund
hereunder.
2. DUTIES OF ADVISER.
The Adviser, at its own expense, shall furnish the following services
and facilities to the Trust:
(a) Investment Program. The Adviser will (i) furnish continuously an
investment program of each Fund, (ii) determine (subject to the overall
supervision and review of the Board of Trustees of the Trust) what investments
shall be purchased, held sold or exchanged by each Fund and what portion, if
any, of the assets of each Fund shall be held uninvested, and (iii) make changes
on behalf of the Trust in the investments of each Fund.
(b) Office Space and Facilities. The Adviser shall furnish the Trust
office space in the offices of the Adviser, or in such other place or places as
may be agreed upon from time to time, and all necessary office facilities,
simple business equipment, supplies, utilities, and telephone service for
managing the investments of the Trust. These services are exclusive of the
necessary services and
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records of any dividend disbursing agent, transfer agent, registrar or
custodian, and accounting and bookkeeping services to provided by the Trust's
transfer agent, record keeping service or custodian.
(c) Distribution Expenses. Except as may be provided in distribution
expense plans as contemplated by Rule 12b-1 under the 1940 Act, the Adviser
shall bear all sales, promotions or distribution expenses in connection with the
distribution of shares of any Fund and shall be the sole judge of the extent to
which sales or promotion expenses shall be incurred; provided however, that the
Adviser shall not be obligated to pay for any portion of the cost of
prospectuses or periodic reports provided to shareholders. Expenses incurred in
complying with laws regulating the issue or sale of securities shall not be
deemed to be sales, promotion or distribution expenses.
(d) Portfolio Transactions. The Adviser shall place all orders for the
purchase and sale of portfolio securities for the account of each Fund with
brokers or dealers selected by the Adviser, although the Trust will pay the
actual brokerage commissions on portfolio transactions in accordance with
Paragraph 3(c). In executing portfolio transactions and selecting brokers or
dealers, the Adviser will use its best efforts to seek on behalf of the Trust or
any Fund thereof the best overall terms available. In assessing the best overall
terms available for any transaction, the Adviser shall consider all factors 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 (for the specific
transaction and on a continuing basis). In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a particular
transaction, the Adviser 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 any Fund and/or other accounts over which the Adviser or an
affiliate of the Adviser exercises investment discretion. The Adviser is
authorized to pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for any fund which
is in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if, but only if, the Adviser 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 all of the accounts over
which investment discretion is so exercised.
3. ALLOCATION OF EXPENSES.
Except for the services and facilities to be provided by the Adviser as
set forth in Paragraph 2 above, the Trust assumes and shall pay all expenses for
all other Trust operations and activities and shall reimburse the Adviser for
any such expenses incurred by the Adviser. The expenses to be borne by the Trust
shall include, without limitation:
(a) The charges and expenses of any registrar, stock transfer or
dividend disbursing agent, custodian, or depository appointed by the Trust for
the safekeeping of its cash, portfolio securities and other property;
(b) The charges and expenses of auditors;
(c) Brokerage commissions for transactions in the portfolio securities
of the Trust;
(d) All taxes, including issuance and transfer taxes, and corporate
fees payable by the Trust to Federal, state or other governmental agencies;
(e) The cost of stock certificates (if any) representing shares of the
Trust;
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(f) Expenses involved in registering and maintaining registrations of
the Trust and of its shares with the Securities and Exchange Commission and
various states and other jurisdictions, including reimbursement of actual
expenses incurred by the Adviser in performing such functions for the Trust, and
including compensation of persons who are Adviser employees in proportion to the
relative time spent on such matters;
(g) All expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, printing and mailing proxy statements,
quarterly reports, semi-annual reports, annual reports and other communications
to shareholders;
(h) All expenses of preparing and setting in type prospectuses, and
expenses of printing and mailing the same to shareholders [but not expenses of
printing and mailing of prospectuses and literature used for promotional
purposes in accordance with Paragraph 2(d) above];
(i) Compensation and travel expenses of Trustees who are not "interest
persons" within the meaning of the 1940 Act;
(j) The expense of furnishing, or causing to be furnished, to each
shareholder a statement of his account, including the expense of mailing;
(k) Charges and expenses of legal counsel and internal audit/compliance
personnel in connection with matters relating to the Trust, including, without
limitations, legal services rendered in connection with the
Trust's corporate and financial structure and relations with its shareholders,
issuance of Trust shares, and registration and qualification of securities under
Federal, state and other laws;
(l) The expenses of attendance at professional meetings of
organizations such as the Investment Company Institute, or Commerce Clearing
House by officers and Trustees of the Trust, and the membership or association
dues of such organizations;
(m) The cost and expense of maintaining the books and records of the
Trust, including general ledger accounting;
(n) The expense of obtaining and maintaining a fidelity bond as Section
17(g) of the 1940 Act;
(o) Interest payable on Trust borrowings; and
(p) Postage.
4. ADVISORY FEE.
(a) For the services and facilities to be provided to each of the Funds
by the Adviser as provided in Paragraph 2 hereof, the Trust shall pay the
Adviser a monthly fee with respect to each of the Funds as soon as practical
after the last day of each calendar month, which fee shall be paid at the rate
set forth below based upon the Monthly Average Net Assets [as defined in
subparagraph (c) below] of such Fund for such calendar month:
ADVISORY FEE SCHEDULE
MONTHLY
FUND FEE RATE
ICON Basic Materials Fund 1/12 of 1.00%
ICON Capital Goods Fund 1/12 of 1.00%
ICON Consumer Cyclicals Fund 1/12 of 1.00%
ICON Consumer Staples Fund 1/12 of 1.00%
ICON Energy Fund 1/12 of 1.00%
ICON Financial Services Fund 1/12 of 1.00%
ICON Healthcare Fund 1/12 of 1.00%
ICON Leisure Fund 1/12 of 1.00%
ICON Technology Fund 1/12 of 1.00%
ICON Telecommunication & Utilities Fund 1/12 of 1.00%
ICON Transportation Fund 1/12 of 1.00%
ICON North Asia Region Fund 1/12 of 1.00%
ICON South Asia Region Fund 1/12 of 1.00%
ICON North Europe Region Fund 1/12 of 1.00%
ICON South Europe Region Fund 1/12 of 1.00%
ICON Western Hemisphere Fund 1/12 of 1.00%
ICON Short-Term Fixed Income Fund 1/12 of 0.65%
(b) In the case of termination of this Agreement with respect to any
Fund during any calendar month, the fee with respect to such Fund for that month
shall be reduced proportionately based upon the number of calendar days during
which it is in effect and the fee shall be computed upon the average net assets
of such Fund for the business days which it is so in effect. (c) The "Monthly
Average Net Assets" of any Fund of the Trust for any calendar month shall be
equal to the quotient produced by dividing (i) the sum of the net assets of such
Fund, determined in accordance with procedures established from time to time by
or under the direction of the Board of Trustees of the Trust in accordance with
the Declaration of Trust of the Trust, as of the close of business on each day
during such month that such Fund was open for business, by (ii) the number of
such days.
5. EXPENSE LIMITATION.
The Adviser agrees that for any fiscal year of the Trust during which
the total of all expenses of the (including investment Advisory fees under this
agreement, but excluding interest, portfolio brokerage commissions and expenses,
taxes and extraordinary items) exceeds the lowest expense limitation imposed in
any state in which the Trust is then making sales of its shares or in which its
shares are then qualified for sale, the Adviser will reimburse the Trust for
such expenses not otherwise excluded from reimbursement by this Paragraph 5 to
the extent that they exceed such expense limitation.
6. RELATIONS WITH TRUST.
Subject to and in accordance with the Declaration of Trust and By-laws of
the Trust and the Articles of Incorporation and By-laws of the Adviser,
respectively, it is understood that Trustees, officers, agents and shareholders
of the Trust are or may be interested in the Adviser (or any successor thereof)
as directors, officers, or otherwise; that directors, officers, agents and
shareholders of the Adviser are or may be interested in the Trust as Trustees,
officers, shareholders, or otherwise; that the Adviser (or any such successor)
is or may be interested in the Trust as a shareholder or otherwise; and that the
effect of any such adverse interests shall be governed by said Declaration of
Trust, Articles of Incorporation and By-laws.
7. LIABILITY OF ADVISER AND OFFICERS AND TRUSTEES OF THE TRUST.
No provision of this Agreement shall be deemed to protect the Adviser
against any liability to the Trust or its shareholders to which it might
otherwise be subject by reason of any willful misfeasance, bad faith or gross
negligence in the performance of its duties or the reckless disregard of its
obligations and duties under this Agreement. Nor shall any provision hereof be
deemed to protect any Trustee or officer of the Trust against any such liability
to which he might otherwise be subject by reason of any willful misfeasance, bad
faith or gross negligence in the performance of his duties or the reckless
disregard of his obligations and duties.
8. DURATION AND TERMINATION OF THIS AGREEMENTS.
(a) Duration. This Agreement shall become effective with respect to
each Initial Fund on the date hereof and, with respect to any additional Fund,
on the date of receipt by the Trust of notice from the Adviser in accordance
with Paragraph 1(b) hereof that the Manager is willing to serve as Adviser with
respect to such Fund. Unless terminated as herein provided, this Agreement shall
remain in full force and effect for a period of two years with respect to the
Initial Funds and, with respect to each additional Fund, until one year
following the date on which such Fund becomes a Fund hereunder, and shall
continue in full force and effect for period on one year thereafter with respect
to each Fund so long as such continuance with respect to any such Fund is
approved at least annually (i) by either the Trustees of the Trust or by vote of
a majority of the outstanding voting shares (as defined in the 0000 Xxx) of such
Fund, and (ii) in either event by the vote of a majority of the Trustees of the
Trust who are not parties to this Agreement or "interested persons" (as defined
in the 0000 Xxx) of any such party, cast in person at a meeting called for the
purpose of voting on such approval. Any approval of this Agreement by the
holders of a majority of the outstanding shares (as defined in the 0000 Xxx) of
any Fund shall be effective to continue this Agreement with respect to any such
Fund notwithstanding (i) that this Agreement has not been approved by the
holders of a majority of the outstanding shares of any other Fund affected
thereby, and (ii) that this Agreement has not been approved by the vote of a
majority of the outstanding shares of the Trust, unless approval shall be
required by any other applicable law or otherwise.
(b) Termination. This Agreement may be terminated at any time, without
payment of any penalty, by vote of the Trustees of the Trust or by vote of a
majority of the outstanding shares (as defined in the 1940 Act), or by the
Adviser on sixty (60) days' written notice to the other party.
(c) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment.
9. SERVICES NOT EXCLUSIVE.
The services of the Adviser to the Trust 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.
10. LIMITATION OF LIABILITY.
(a) THE TRUST. The term "ICON Funds" means and refers to the Trustees
from time to time serving under the Master Trust Agreement of the Trust dated
September 19, 1996, as the same may subsequently thereto have been, or
subsequently hereto be amended. It is expressly agreed that the obligations of
the Trust hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally, but bind only
the assets and property of the Trust, as provided in the Master Trust Agreement
of the Trust. The execution and delivery of this Agreement have been authorized
by the Trustees and shareholders of the Trust and signed by an authorized
officer of the Trust, acting as such, and neither such authorization by such
Trustees and shareholders nor such execution and delivery by such officer shall
be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the assets and property
of the Trust as provided in its Master Trust Agreement.
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(b) THE ADVISER. It is expressly agreed that the oblations of the
Adviser hereunder shall not be binding upon any of the shareholders, nominees,
officers, agents or employees of the Adviser, personally, but bind only the
assets and property of the Adviser, respectively. The execution and delivery of
the Agreement have been authorized by the directors and officers of the Adviser
and signed by an authorized officer of the Adviser, acting as such, and neither
such authorization by such directors and officers nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the assets and property of the Adviser, respectively. This limitation
of liability shall not be deemed to protect the shareholders, nominees,
officers, agents or employees of the Adviser against any liability to the Trust
or its shareholders to which they might otherwise be subject by reason of any
willful misfeasance, bad faith or gross negligence in the performance of their
duties or the reckless disregard of their obligations and duties under this
Agreement.
11. INTERPRETATION.
This Agreement shall be governed by the laws of the State of Colorado.
If any provision 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
ICON FUNDS MERIDIAN INVESTMENT MANAGEMENT CORPORATION
By /s/ Xxxxxxx X. Xxxx By /s/ Xxxxxxx X. Xxxx
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President President
Attest: Attest:
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