EXHIBIT (5)(a)(1)
EQUIFUND--XXXXXX NATIONAL FIDUCIARY EQUITY FUNDS
INVESTMENT ADVISORY CONTRACT
CONTRACT made this 25th day of August, 1994, between EQUIFUND--XXXXXX
NATIONAL FIDUCIARY EQUITY FUNDS, a Massachusetts business trust (the "Trust"),
on behalf of XXXXXX EQUIFUND--DUTCH NATIONAL FIDUCIARY EQUITY FUND, XXXXXX
EQUIFUND--HONG KONG NATIONAL FIDUCIARY EQUITY FUND, XXXXXX EQUIFUND--ITALIAN
NATIONAL FIDUCIARY EQUITY FUND and XXXXXX EQUIFUND--SPANISH NATIONAL FIDUCIARY
EQUITY FUND, and any other series of the Trust which the Adviser (as defined
below) and the Trust shall agree from time to time to be subject to this
Agreement (collectively, the "Funds"), and The Winthrop Corporation, a
Connecticut corporation doing business as XXXXXX INVESTORS' SERVICE (the
"Adviser"):
1. Duties of the Adviser. The Trust, on behalf of each Fund, hereby employs
the Adviser to act as investment adviser for and to manage the investment and
reinvestment of the assets of the Fund and, except as otherwise provided in an
administration agreement, to administer their affairs, subject to the
supervision of the Trustees of the Trust, for the period and on the terms set
forth in this Contract.
The Adviser hereby accepts such employment, and undertakes to afford to the
Trust the advice and assistance of the Adviser's organization in the choice of
investments and in the purchase and sale of securities for each Fund and to
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Funds
and for administering the Trust's affairs and to pay the salaries and fees of
all officers and Trustees of the Trust who are members of the Adviser's
organization and all personnel of the Adviser performing services relating to
research and investment activities. The Adviser 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 Trust in
any way or otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the
proper supervision of the Funds. As investment adviser to the Funds, the Adviser
shall furnish continuously an investment program and shall determine from time
to time what securities shall be purchased, sold or exchanged and what portion
of each Fund's assets shall be held uninvested, subject always to the applicable
restrictions of the Declaration of Trust, By-Laws and registration statement of
the Trust under the Investment Company Act of 1940, all as from time to time
amended. The Adviser is authorized, in its discretion and without prior
consultation with the Trust, but subject to each Fund's investment objective,
policies and restrictions, to buy, sell, lend and otherwise trade in any stocks,
bonds, options and other securities and investment instruments on behalf of the
Funds, to purchase, write or sell options on securities, futures contracts or
indices on behalf of the Funds, to enter into commodities contracts on behalf of
the Funds, including contracts for the future delivery of securities or currency
and futures contracts on securities or other indices, and to execute any and all
agreements and instruments and to do any and all things incidental thereto in
connection with the management of the Funds. Should the Trustees of the Trust at
any time, however, make any specific determination as to investment policy for
the period, if any, specified in such notice or until similarly notified that
such determination has been revoked. The Adviser shall take, on behalf of the
Funds, all actions which it deems necessary or desirable to implement the
investment policies of the Trust and of each Fund.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of a Fund with brokers or dealers selected by the
Adviser, and to that end the Adviser is authorized as the agent of the Fund to
give instructions to the custodian of the Fund as to deliveries of securities
and payments of cash for the account of a Fund or the Trust. In connection with
the selection of such brokers or dealers and the placing of such orders, the
Adviser shall use its best efforts to seek to execute portfolio security
transactions at prices which are advantageous to the Fund and (when a disclosed
commission is being charged) at reasonably competitive commission rates. In
selecting brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and research
services and products (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Adviser and the Adviser is expressly
authorized to cause the Funds to pay any broker or dealer who provides such
brokerage and research service and products a commission for executing a
security transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if the
Adviser determines in good faith that such amount of commission is 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
overall responsibilities which the Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. Subject to the
requirement set forth in the second sentence of this paragraph, the Adviser is
authorized to consider, as a factor in the selection of any broker or dealer
with whom purchase or sale orders may be placed, the fact that such broker or
dealer has sold or is selling shares of the Fund or the Trust or of other
investment companies sponsored by the Adviser.
2. Compensation of the Adviser. For the services, payments and facilities
to be furnished hereunder by the Adviser, the Trust on behalf of each Fund shall
pay to the Adviser on the last day of each month a fee equal to the percentage
of the average daily net assets of each Fund of the Trust throughout the month,
computed in accordance with the Trust's Declaration of Trust and any applicable
votes of the Trustees of the Trust, as shown in the following table:
ANNUAL ADVISORY FEE RATES
Under $500 Million
$500 to Over
Million $1 Billion $1 Billion
-----------------------------------------
0.75% 0.73% 0.68%
In case of initiation or termination of the Contract during any month with
respect to any Fund, each Fund's fee for that month shall be reduced
proportionately on the basis of the number of calendar days during which the
Contract is in effect and the fee shall be computed upon the average net assets
for the business days the Contract is so in effect for that month.
The Adviser may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Trust will
pay all its expenses other than those expressly stated to be payable by the
Adviser hereunder, which expenses payable by the Trust shall include, without
implied limitation (i) expenses of maintaining the Trust and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, sale,
repurchase and redemption of shares, (viii) expenses of registering and
qualifying the Trust and its shares under federal and state securities laws and
of preparing and printing prospectuses for such purposes and for distributing
the same to shareholders and investors, and fees and expenses of registering and
maintaining registration of the Trust and of the Trust's principal underwriter,
if any, as broker-dealer or agent under state securities laws, (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 Trust (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 and registrars for all
services to the Trust, (xv) expenses for servicing shareholder accounts, (xvi)
any direct charges to shareholders approved by the Trustees of the Trust,
(xviii) all payments to be made and expenses to be assumed by the Trust pursuant
to any one or more distribution plans adopted by the Trust pursuant to Rule
12b-1 under the Investment Company Act of 1940, (xix) the administration fee
payable to the Trust's administrator and (xx) such nonrecurring items as may
arise, including expenses incurred in connection with litigation, proceedings
and claims and the obligation of the Trust to indemnify its Trustees and
officers with respect thereto.
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the Adviser as
directors, officers, employees, stockholders or otherwise and that directors,
officers employees and stockholders of the Adviser are or may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as a shareholder or otherwise. It is also understood
that directors, officers, employees and stockholders of the Adviser are or may
be or become interested (as directors, trustees, officers, employees,
stockholders or otherwise) in other companies or entities (including, without
limitation, other investment companies) which the Adviser may organize, sponsor
or acquire, or with which it may merge or consolidate, and which may include the
words "Xxxxxx" or "Xxxxxx Investors" or any combination thereof as part of their
names, and that the Adviser or its subsidiaries or affiliates may enter into
advisory or management agreements or other contracts or relationships with such
other companies or entities.
5. Limitation of Liability of the Adviser. The services of the Adviser to
the Trust are not to be deemed to be exclusive, the Adviser 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 Adviser, the Adviser shall
not be subject to liability to the Trust or to any shareholder of the Trust 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 purchase, holding or
sale of any security.
6. Sub-Investment Advisers. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such sub-investment
adviser and approved by the Trustees of the Trust.
7. Duration and Termination of this Contract. This Contract shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect as to each Fund to and including
February 28, 1996 and shall continue in full force and effect as to each Fund
indefinitely thereafter, but only so long as such continuance after February 28,
1996 is specifically approved at least annually (i) by the Trustees of the Trust
or by vote of a majority of the outstanding
voting securities of that Fund and (ii) by the vote of a majority of those
Trustees of the Trust who are not interested persons of the Adviser or (other
than as a Trustee) the Trust cast in person at a meeting called for the purpose
of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract as to any Fund, without the payment
of any penalty, by action of its Board of Directors or Trustees, as the case may
be, and the Trust may, at any time upon such written notice to the Adviser,
terminate this Contract as to any Fund by vote of a majority of the outstanding
voting securities of that Fund. This Contract shall terminate automatically in
the event of its assignment.
8. Amendments of the Contract. This Contract may be amended as to any Fund
by a writing signed by both parties hereto, provided that no amendment to this
Contract shall be effective as to that Fund until approved (i) by the vote of a
majority of those Trustees of the Trust who are not interested persons of the
Adviser or the Trust cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the outstanding
voting securities of that Fund.
9. Limitation of Liability. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust (Article XIV, Section 2)
limiting the personal liability of shareholders of the Trust, and the Adviser
hereby agrees that it shall have recourse only to the Trust for payment of
claims or obligations as between the Trust and Adviser arising out of this
Contract and shall not seek satisfaction from the shareholders or any
shareholder of the Trust. No series of the Trust shall be liable for the
obligations of any other series of the Trust.
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 of that Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the particular Fund present or
represented by proxy at the meeting of holders of more than 50 per centum of the
outstanding shares of the particular Fund are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the outstanding shares of the
particular fund.
11. Use of the Name "Xxxxxx." The Adviser hereby consents to the use by the
Trust of the name "Xxxxxx" as part of the Trust's name and the name of each
Fund; provided, however, that such consent shall be conditioned upon the
employment of the Adviser or one of its affiliates as the investment adviser of
the Trust. The name "Xxxxxx" or any variation thereof may be used from time to
time in other connections and for other purposes by the Adviser and its
affiliates and other investment companies that have obtained consent to the use
of the name "Xxxxxx". The Adviser shall have the right to require the Trust to
cease using the name "Xxxxxx" as part of the Trust's name and the name of each
Fund if the Trust ceases, for any reasons, to employ the Adviser or one of its
affiliates as the Trust's investment adviser. Future names adopted by the Trust
for itself and its Funds, insofar as such names include identifying words
requiring the consent of the Adviser, shall be the property of the Adviser and
shall be subject to the same terms and conditions.
EQUIFUND--XXXXXX NATIONAL THE WINTHROP CORPORATION
FIDUCIARY EQUITY FUNDS D/B/A/ XXXXXX INVESTORS'
on behalf of each of the SERVICE
FUNDS first listed above
By:/s/ Xxxxx X. Xxxxxxx By:/s/ Xxxxxx Xxxxxxxx
President Executive Vice President
