Exhibit 5(b)
XXXXXXX CAPITAL GROWTH FUND
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
May 1, 1987
Xxxxxxx, Xxxxxxx & Xxxxx Ltd.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Investment Advisory Agreement
(Xxxxxxx Equity Income Fund)
Dear Sirs:
Xxxxxxx Capital Growth Fund (the "Trust") has been established as a
Massachusetts business trust to engage in the business of an investment company.
The shares of beneficial interest of the Trust ("Shares") are divided into
multiple series, including Xxxxxxx Equity Income Fund (the "Fund"), as
established pursuant to a written instrument executed by the Trustees of the
Trust. Series may be terminated, and additional series established, from time to
time by action of the Trustees. The Trust on behalf of the Fund has selected you
to act as the sole investment adviser of the Fund and to provide certain other
services, as more fully set forth below, and you are willing to act as such
investment adviser and to perform such services under the terms and conditions
hereinafter set forth. Accordingly, the Trust agrees with you as follows:
1. Delivery of Fund Documents. The Trust has furnished you with copies
properly certified or authenticated of each of the following:
(a) Declaration of Trust of the Trust dated October 16, 1985, as amended
from time to time (the "Declaration of Trust").
(b) Establishment and Designation of Series of Shares of Beneficial
Interest, $.01 Par Value Per Share, establishing the Fund.
(c) By-Laws of the Trust as in effect on the date hereof.
(d) Resolutions of the Trustees selecting you as investment adviser and
approving the form of this Agreement.
The Trust will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
2. Name of Fund. The Trust may use the name "Xxxxxxx Equity Income Fund"
or any name derived from the name "Xxxxxxx, Xxxxxxx & Xxxxx" in connection with
the Fund only for so long as this Agreement or any extension, renewal or
amendment hereof remains in effect, including any similar agreement with any
organization which shall have succeeded to your business as investment adviser.
At such time as such an agreement shall no longer be in effect, the Trust (to
the extent that it lawfully can) will cause the Fund to cease to use such a name
or any other name indicating that it is advised by or otherwise connected with
you or any organization which shall have so succeeded to your business.
3. Advisory Services. You will regularly provide the Fund with investment
research, advice and supervision and will furnish continuously an investment
program for the Fund consistent with the investment objectives and policies of
the Fund. You will determine what securities shall be purchased for the Fund,
what securities shall be held or sold by the Fund, and what portion of the
Fund's assets shall be held uninvested, subject always to the provisions of the
Trust's Declaration of Trust and By-Laws and of the Investment Company Act of
1940, as amended, and to the investment objectives, policies and restrictions of
the Fund, as each of the same shall be from time to time in effect, and subject,
further, to such policies and instructions as the Trustees may from time to time
establish. You shall advise and assist the officers of the Trust in taking such
steps as are necessary or appropriate to carry out the decisions of the Trustees
and the appropriate committees of the Trustees regarding the conduct of the
business of the Trust insofar as it relates to the Fund.
4. Allocation of Charges and Expenses. You will pay the compensation and
expenses of all officers and executive employees of the Trust and will make
available, without expense to the Trust, the services of such of your directors,
officers and employees as may duly be elected officers or Trustees of the Trust,
subject to their individual consent to serve and to any limitations imposed by
law. You will pay the Fund's office rent and will provide investment advisory,
research and statistical facilities and all clerical services relating to
research, statistical and investment work. You will not be required to pay any
expenses of the Trust other than those specifically allocated to you in this
paragraph 4. In particular, but without limiting the generality of the
foregoing, you will not be required to pay: organization expenses of the
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Fund; clerical salaries; fees and expenses incurred by the Trust in connection
with membership in investment company organizations; brokers' commissions;
payment for portfolio pricing services to a pricing agent, if any; legal,
auditing or accounting expenses; taxes or governmental fees; the fees and
expenses of the transfer agent of the Trust; the cost of preparing Share
certificates or any other expenses, including clerical expenses of issue,
redemption or repurchase of shares of beneficial interest of the Fund; the
expenses of and fees for registering or qualifying securities for sale; the fees
and expenses of Trustees of the Trust who are not affiliated with you; the cost
of preparing and distributing reports and notices to shareholders; or the fees
or disbursements of custodians of the Fund's assets, including expenses incurred
in the performance of any obligations enumerated by the Declaration of Trust or
By-Laws of the Trust insofar as they govern agreements with any such custodian.
You shall not be required to pay expenses of activities which are primarily
intended to result in sales of Shares of the Fund if and to the extent that (i)
such expenses are required to be borne by a principal underwriter which acts as
the distributor of the Fund's Shares pursuant to an underwriting agreement which
provides that the underwriter shall assume some or all of such expenses, or (ii)
the Trust on behalf of the Fund shall have adopted a plan in conformity with
Rule 12b-1 under the Investment Company Act of 1940, as amended, providing that
the Fund (or some other party) shall assume some or all of such expenses. You
shall be required to pay such of the foregoing expenses as are not required to
be paid by the principal underwriter pursuant to the underwriting agreement or
are not permitted to be paid by the Fund (or some other party) pursuant to such
a plan.
5. Compensation of the Adviser. For all services to be rendered and
payments made as provided in paragraphs 3 and 4 hereof, the Trust on behalf of
the Fund will pay you on the last day of each month a fee equal to the sum of
13/240 of 1% of the average daily net assets, as defined below, of the Fund. The
"average daily net assets" of the Fund are defined as the average of the values
placed on the net assets as of the close of the New York Stock Exchange on each
day on which the net asset value of the Fund's portfolio is determined
consistent with the provisions of Rule 22c-1 under the Investment Company Act of
1940 or, if the Fund lawfully determines the value of the net assets of its
portfolio as of some other time on each business day, as of such time. The value
of net assets of the Fund shall be determined pursuant to the applicable
provisions of the Declaration of Trust of the Trust. If, pursuant to such
provisions, the determination of net asset value is suspended for any particular
business day, then for the purposes of this paragraph 5, the value of the net
assets of the Fund as last determined shall be deemed to be the value of the net
assets as of the close of the New York Stock Exchange, or as of such other time
as the value of the net assets of the Fund's portfolio may lawfully be
determined, on that
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day. If the determination of the net asset value of the Shares of the Fund has
been suspended pursuant to the Declaration of Trust of the Trust for a period
including such month, your compensation payable at the end of such month shall
be computed on the basis of the value of the net assets of the Fund as last
determined (whether during or prior to such month). If the Fund determines the
value of the net assets of its portfolio more than once on any day, the last
such determination thereof on that day shall be deemed to be the sole
determination thereof on that day for the purposes of this paragraph 5. You
agree that your compensation for any fiscal year shall be reduced by the amount,
if any, by which the expenses of the Fund for such fiscal year exceed the lowest
applicable expense limitation established pursuant to the statutes or
regulations of any jurisdiction in which the Shares of the Fund may be qualified
for offer and sale. You shall refund to the Fund the amount of any reduction of
your compensation pursuant to this paragraph 5 as promptly as practicable after
the end of such fiscal year, provided that you will not be required to pay the
Fund an amount greater than the fee paid to you in respect of such year pursuant
to this Agreement. As used in this paragraph 5, "expenses" shall mean those
expenses included in the applicable expense limitation having the broadest
specifications thereof, and "expense limitation" means a limit on the maximum
annual expenses which may be incurred by an investment company determined (i) by
multiplying a fixed percentage by the average, or by multiplying more than one
such percentage by different specified amounts of the average, of the values of
an investment company's net assets for a fiscal year or (ii) by multiplying a
fixed percentage by an investment company's net investment income for a fiscal
year. The words "lowest applicable expense limitation" shall be construed to
result in the largest reduction of your compensation for any fiscal year of the
Fund.
6. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither you nor any
of your directors, officers or employees will act as a principal or agent or
receive any commission. You or your agent shall arrange for the placing of all
orders for the purchase and sale of portfolio securities for the Fund's account
with brokers or dealers selected by you. In the selection of such brokers or
dealers and the placing of such orders, you are directed at all times to seek
for the Fund the most favorable execution and net price available. If any
occasion should arise in which you give any advice to clients of yours
concerning the Shares of the Fund, you will act solely as investment counsel for
such clients and not in any way on behalf of the Fund. Your services to the Fund
pursuant to this Agreement are not to be deemed to be exclusive and it is
understood that you may render investment advice, management and other services
to others.
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7. Limitation of Liability of Adviser. You shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on your part
in the performance of your duties or from reckless disregard by you of your
obligations and duties under this Agreement. Any person, even though also
employed by you, who may be or become an employee of and paid by the Trust or
the Fund shall be deemed, when acting within the scope of his employment by the
Trust, to be acting in such employment solely for the Trust and not as your
employee or agent.
8. Duration and Termination of this Agreement. This Agreement shall remain
in force until September 30, 1987, and from year to year thereafter, but only so
long as such continuance is specifically approved at least annually by the vote
of a majority of the Trustees who are not interested persons of you or of the
Trust, cast in person at a meeting called for the purpose of voting on such
approval and by a vote of the Trustees or of a majority of the outstanding
voting securities of the Fund. The aforesaid requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the Investment Company Act of 1940 and the rules and
regulations thereunder. This Agreement may, on 60 days' written notice, be
terminated at any time without the payment of any penalty, by the Trustees, by
vote of a majority of the outstanding voting securities of the Fund, or by you.
This Agreement shall automatically terminate in the event of its assignment. In
interpreting the provisions of this Agreement, the definitions contained in
Section 2(a) of the Investment Company Act of 1940 (particularly the definitions
of "interested person," "assignment" and "majority of the outstanding voting
securities"), as from time to time amended, shall be applied, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order.
9. Amendment of this Agreement. No provisions of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the outstanding
voting securities of the Fund and by the Trustees, including a majority of the
Trustees who are not interested persons of you or of the Trust, cast in person
at a meeting called for the purpose of voting on such approval.
10. Miscellaneous. It is understood and expressly stipulated that neither
the holders of Shares of the Trust or the Fund nor the Trustees shall be
personally liable hereunder. The captions in this Agreement are included for
convenience of
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reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
The name "Xxxxxxx Capital Growth Fund" is the designation of the Trustees
for the time being under a Declaration of Trust dated October 16, 1985, as
amended from time to time, and all persons dealing with the Trust or the Fund
must look solely to the property of the Trust or Fund for the enforcement of any
claims against the Trust as neither the Trustees, officers, agents or
shareholders assume any personal liability for obligations entered into on
behalf of the Trust. No series of the Trust shall be liable for any claims
against any other series of the Trust.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract.
Yours very truly,
XXXXXXX CAPITAL GROWTH FUND
By: /s/ [ILLEGIBLE]
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President
The foregoing Agreement is hereby accepted as of the date thereof.
XXXXXXX, XXXXXXX & XXXXX LTD.
By: /s/ Xxxxx X. Xxx
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Managing Director
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