THE XXXXXX EQUIFUND EQUITY TRUST
INVESTMENT ADVISORY CONTRACT
CONTRACT made this 3rd day of September, 1996, between THE XXXXXX
EQUIFUND EQUITY TRUST, a Massachusetts business trust (the "Trust"), on behalf
of XXXXXX EQUIFUND-ITALIAN and XXXXXX EQUIFUND-SPANISH, 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
Xxxxxx Investors' Service, Inc., a Connecticut corporation (the "Adviser"):
1. Duties of the Adviser. The Trust, on behalf of the 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 its 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 the 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 Fund
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 Fund. As investment adviser to the Fund, 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 the
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 the 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
Fund, to purchase, write or sell options on securities, futures contracts or
indices on behalf of the Fund, to enter into commodities contracts on behalf of
the Fund, 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 Fund. 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
Fund, all actions which it deems necessary or desirable to implement the
investment policies of the Trust and of the Fund.
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of the 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 the 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 Fund 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 and products 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 the
Fund shall pay to the Adviser on the last day of each month a fee equal to a
percentage of the average daily net assets of the 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 the Fund, the 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 a
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 through and including
February 28, 1997 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after February 28, 1997 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 the 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 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 the Fund. This Contract shall terminate automatically in the event
of its assignment.
8. Amendments of the Contract. This Contract may be amended 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 the 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 hereunder 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 the Fund" 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 of 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.
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 the
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 the
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.
THE XXXXXX EQUIFUND EQUITY TRUST XXXXXX INVESTORS' SERVICE, INC.
on behalf of Xxxxxx EquiFund-Italian
and Xxxxxx EquiFund-Spanish
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx Xxxxxxxx
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President Executive Vice President
