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2(G)(2)
INVESTMENT ADVISORY AGREEMENT
AMONG
FIDELITY INTERNATIONAL INVESTMENT ADVISORS
AND
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY ADVISORY KOREA FUND, INC.
AGREEMENT made this 25th day of October, 1994 by and among Fidelity
Management & Research Company, a Massachusetts corporation with principal
offices at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (hereinafter called the
"Manager"); Fidelity International Investment Advisors, a Bermuda company with
principal offices at Pembroke Hall, Pembroke, Bermuda (hereinafter called the
"Advisor"); and Fidelity Advisor Korea Fund, Inc., a Maryland corporation which
may issue one or more series of shares (hereinafter called the "Fund").
WHEREAS the Fund and the Manager have entered into an Investment Management
Agreement on behalf of the Fund, pursuant to which the Manager is to act as
investment manager of the Fund; and
WHEREAS the Advisor and its subsidiaries and other affiliated persons have
personnel in various locations throughout the world and have been formed in part
for the purpose of researching and compiling information and recommendations
with respect to the economies of various countries, and securities of issuers
located in such countries, and providing investment advisory services in
connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Fund, the Manager and the Advisor agree as follows:
1. DUTIES: The Manager hereby appoints the Advisor to perform the following
services with respect to all of the investment of the Fund. The Advisor shall
pay the salaries and fees of all personnel of the Advisor performing services
for the Fund relating to research, statistical and investment activities.
(A) INVESTMENT DISCRETION: The Advisor shall, subject to the
supervision of the Manager, manage the investment of the Fund in accordance
with the investment objective, policies and limitations provided in the
Fund's Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 (the "1940 Act") and rules
thereunder, as amended from time to time, and such other limitations as the
Directors or the Manager may impose with respect to the Fund by notice to
the Advisor. The Advisor is authorized to make investment decisions on
behalf of the Fund by notice to the Advisor. The Advisor is authorized to
make investment decisions on behalf of the Fund with regard to any stock,
bond, other security or investment instrument, and to place orders for the
purchase and sale of such securities or other instruments through such
broker-dealers as the Advisor may select. The Advisor is also authorized to
provide additional investment management services to the Fund, including
but not limited to services such as managing foreign currency investments,
purchasing and selling or writing futures and options contracts, borrowing
money, or lending securities on behalf of the Fund. All investment
management and any other activities of the Advisor shall at all times be
subject to the control and direction of the Manager and the Fund's Board of
Directors.
SUBSIDIARIES AND AFFILIATES: The Advisor may perform any or all of the
services contemplated by this Agreement directly or through such of its
subsidiaries or other affiliated persons as the Advisor shall determine;
provided, however, that performance of such services through such
subsidiaries or other affiliated persons shall have been approved by the
Fund to the extent required pursuant to the 1940 Act and rules thereunder.
2. INFORMATION TO BE PROVIDED TO THE FUND AND THE MANAGER: The Advisor
shall furnish such reports, evaluations, information or analyses to the Fund and
the Manager as the Fund's Board of Directors or the Manager may reasonably
request from time to time, or as the Advisor may deem to be desirable.
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3. BROKERAGE: In connection with the services provided under paragraph 1(a)
of this Agreement, the Advisor shall place all orders for the purchase and sale
of Fund securities for the Fund's account with brokers or dealers selected by
the Advisor, which may include brokers or dealers affiliated with the Manager or
Advisor. The Advisor shall use its best efforts to seek to execute Fund
transactions at prices which are advantageous to the Fund and at commission
rates which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
to the Fund and/or to the other accounts over which the Advisor or Manager
exercise investment discretion. The Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a Fund transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Advisor 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. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Advisor has with respect to accounts over which it exercises
investment discretion. The Directors of the Fund shall periodically review the
commissions paid by the Fund to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Fund.
4. COMPENSATION: The Manager shall compensate the Advisor on the following
basis for the services to be furnished hereunder. For services provided under
this Agreement, the Manager agrees to pay the Advisor a monthly Investment
Advisory Fee. The Investment Advisory Fee shall be equal to 60% of the monthly
management fee rate (including performance adjustments, if any) that the Fund is
obligated to pay the Manager under its Investment Management Agreement with the
Manager. If in any fiscal year the aggregate expenses of the Fund exceed any
applicable expense limitation imposed by any state or federal securities laws or
regulations, and the Manager waives all or a portion of its management fee or
reimburses the Fund for expenses to the extent required to satisfy such
limitation, the Investment Advisory Fee paid to the Advisor will be reduced by
60% of the amount of such waivers or reimbursements multiplied by the fraction
equal to the net assets of the Fund as to which the Advisor shall have provided
the investment management services divided by the net assets of the Fund for
that month. If the Advisor reduces its fees to reflect such waivers or
reimbursements and the Manager subsequently recovers all or any portion of such
waivers and reimbursements, then the Advisor shall be entitled to receive from
the Manager a proportionate share of the amount recovered. To the extent that
waivers and reimbursements by the Manager required by such limitations are in
excess of the Manager's management fee, the Investment Advisory Fee paid to the
Advisor will be reduced to zero for that month, but in no event shall the
Advisor be required to reimburse the Manager for all or a portion of such excess
reimbursements.
5. EXPENSES: It is understood that the Fund will pay all of its expenses
other than those expressly stated to be payable by the Advisor hereunder or by
the Manager under the Investment Management Agreement with the Fund, which
expenses payable by the Fund shall include, without limitation, (i) interest and
taxes; (ii) brokerage commissions and other costs in connection with the
purchase or sale of securities and other investment instruments; (iii) fees and
expenses of the Fund's Directors other than those who are "interested persons"
of the Fund, the Manager or the Advisor; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of the Fund and the
Fund's shares for distribution under state and federal securities laws; (vii)
expenses of printing and mailing reports and notices and proxy material to
shareholders of the Fund; (viii) all other expenses incidental to holding
meetings of the Fund's shareholders, including proxy solicitations therefor;
(ix) 50% of insurance premiums for fidelity and other coverage; (x) its
association membership dues; (xi) expenses of typesetting for printing
Prospectuses and supplements thereto; (xii) expenses of printing and mailing
Prospectuses and supplements thereto; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Fund is a party and the legal obligation which the
Fund may have to indemnify the Fund's Directors and officers with respect
thereto.
6. INTERESTED PERSONS: It is understood that Directors, officers, and
shareholders of the Fund are or may be or become interested in the Manager or
the Advisor as directors, officers or otherwise and that directors,
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officers and stockholders of the Manager or the Advisor are or may be or become
similarly interested in the Fund, and that the Manager or the Advisor may be or
become interested in the Fund as a shareholder or otherwise.
7. SERVICES TO OTHER COMPANIES OR ACCOUNTS: The services of the Advisor to
the Manager are not to be deemed to be exclusive, the Advisor being free to
render services to others and engage in other activities, provided, however,
that such other services and activities do not, during the term of this
Agreement, interfere, in a material manner, with the Advisor's ability to meet
all of its obligations hereunder. The Advisor shall for all purposes be an
independent contractor and not an agent or employee of the Manager or the Fund.
8. STANDARD OF CARE: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Advisor, the Advisor shall not be subject to liability to the
Manager, 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
that may be sustained in the purchase, holding or sale of any security or other
investment instrument.
9. DURATION AND TERMINATION OF AGREEMENT; AMENDMENTS:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until October 25,
1996 and indefinitely thereafter, but only so long as the continuance after
such period shall be specifically approved at least annually by vote of the
Fund's Board of Directors or by vote of a majority of the outstanding
voting securities of the Fund.
(b) This Agreement may be modified by mutual consent of the Manager,
the Advisor and the Fund, such consent on the part of the Fund to be
authorized by vote of a majority of the outstanding voting securities of
the Fund.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification of this
Agreement must have been approved by the vote of a majority of those
Directors of the Fund who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either the Manager, the Advisor or the Fund may, at any time on
sixty (60) days' prior written notice to the other parties, terminate this
Agreement, without payment of any penalty, by action of its Board of
Directors, or with respect to the Fund by vote of a majority of its
outstanding voting securities. This Agreement shall terminate automatically
in the event of its assignment.
10. GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons," when
used herein, shall have the respective meanings specified in the 1940 Act as now
in effect or as hereafter amended.
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IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY INTERNATIONAL INVESTMENT
ADVISORS
BY: /s/ XXXXX X. XXXX
-----------------------------
Title
FIDELITY MANAGEMENT & RESEARCH
COMPANY
BY: /s/ XXXX X. XXXXXX
-----------------------------
Title
FIDELITY ADVISOR KOREA FUND, INC.
BY: /s/ XXXX X. XXXXXX
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Title
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