FIRST DEFINED SECTOR FUND
485BPOS, EX-99.D, 2000-12-28
Previous: FIRST DEFINED SECTOR FUND, 485BPOS, EX-99.C, 2000-12-28
Next: FIRST DEFINED SECTOR FUND, 485BPOS, EX-99.E, 2000-12-28



                            FIRST DEFINED SECTOR FUND

                  INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT

         This  Investment  Advisory and Management  Agreement (the  "Agreement")
made this 15th day of December,  2000, by and between First Defined Sector Fund,
a Massachusetts business trust (the "Company"), on behalf of each series (each a
"fund" and collectively,  the "funds") of the Company,  and First Trust Advisors
L.P. (the "Adviser"), an Illinois limited partnership.

         WHEREAS,  the Company and the Adviser wish to enter into this Agreement
setting  forth the terms and  conditions  under which the Adviser  will  perform
certain  investment  advisory  and  management  services for the funds listed in
Schedule A attached hereto, and be compensated for such services by the funds.

         NOW, THEREFORE,  in consideration of the premises and mutual agreements
hereinafter contained, the Company and the Adviser hereby agree as follows:

SECTION 1.           INVESTMENT ADVISORY SERVICES.

         Section  1.1.  During  the Term (as such term is  defined  in Section 5
hereof) of this  Agreement,  the Adviser shall serve as the  investment  adviser
(within the meaning of the  Investment  Advisers Act of 1940, as amended) of the
funds.  In such  capacity,  the Adviser shall render the following  services and
perform the following functions for and on behalf of the funds:

                   (a)  Furnish  continuous  advice and  recommendations  to the
         funds with respect to the acquisition, holding or disposition of any or
         all of the  securities  or other  assets  which  the  funds  may own or
         contemplate acquiring from time to time;

                   (b) Cause its officers to attend meetings and furnish oral or
         written  reports,  as the Company  reasonably may request,  in order to
         keep  the  Trustees  and  appropriate  officers  of the  Company  fully
         informed  regarding  the  investment   portfolios  of  the  funds,  the
         investment recommendations of the Adviser, and the considerations which
         form the basis for such recommendations; and

                   (c)  Supervise  the  management  of the  fund's  investments,
         including the purchase,  sale,  retention or lending of securities  and
         other investments in accordance with the fund's investment  objectives,
         policies and restrictions.

         Section  1.2.  The  services  of the  Adviser  to  the  funds  are  not
exclusive,  and  nothing  contained  herein  shall be  deemed  or  construed  to
prohibit,  limit, or otherwise restrict the Adviser from rendering investment or
other  advisory  services to any third  person,  whether  similar to those to be
provided to the funds hereunder or otherwise.

SECTION 2.           COMPENSATION OF ADVISER.

         Section  2.1.  For its  services  hereunder,  each  fund  shall pay the
Adviser an annual fee (the  "Fee") as set forth in  Schedule  B. The Fee will be
computed daily and payable monthly in arrears based on average daily net assets.

         Section 2.2.  Notwithstanding the provisions of Section 2.1 hereof, the
amount of the Fee to be paid with  respect to the first and last  months of this
Agreement  shall be pro  rated  based on the  number  of  calendar  days in such
quarter.

         Section  2.3.  The  Adviser  may  voluntarily  waive Fees or  reimburse
expenses  at any time.  Any  amounts  waived or  reimbursed  by the  Adviser are
subject to  reimbursement  by the fund within the following  three years, to the
extent  such  reimbursement  by the fund  would not cause the fund to exceed any
current expense limitation.

SECTION 3.           EXPENSES PAID BY THE ADVISER.

         Section 3.1.    Subject to the  provisions  of  Section 3.2  hereof,
the Adviser  shall pay the following expenses relating to the management and
operation of the funds:

                   (a) All reasonable fees, charges,  costs and expenses and all
         reasonable  compensation  of all  officers  and  Trustees  of the funds
         relating to the  performance  of their  duties to the funds;  provided,
         however, that the Adviser shall not pay any such amounts to any Outside
         Trustees (for purposes of this Agreement,  an "Outside  Trustee" is any
         Trustee of the Company who is not an  "Interested  Person,"  within the
         meaning of Section  2(a)(19) of the Investment  Company Act of 1940, as
         amended (the "1940  Act"));  and provided,  further,  that in the event
         that any person serving as an officer of the Company has both executive
         duties  attendant  to such  office  and  administrative  duties  to the
         Company  apart from such office,  the Adviser shall not pay any amounts
         relating to the performance of such duties;

                   (b) All  costs  of  office  equipment  and  personnel
         necessary  for and  allocable to the performance of the obligations of
         the Adviser hereunder.

         Section 3.2. Except as provided in this Section,  nothing  contained in
this  Agreement  shall be deemed or  construed  to impose  upon the  Adviser any
obligation  to incur,  pay,  or  reimburse  the funds for any other  costs of or
relating to the funds.

SECTION 4.           EXPENSES PAID BY THE FUNDS.

         Section 4.1.  Except as provided in Section 3 hereof,  the funds hereby
assume and shall pay all fees, costs and expenses  incurred by, or on behalf, or
for the benefit of the funds, including without limitation:

                   (a)     All costs of any custodian or depository;

                   (b)     All costs for bookkeeping, accounting, pricing and
        auditors' services;

                   (c)     All costs of leased office space of or allocable to
        the funds within the offices of the Adviser or in such other place as
        may be mutually agreed upon between the parties from time to time;

                   (d)     All costs of any transfer agent and registrar of
        interests of the funds ("Interests");

                   (e)     All costs incurred by any Outside Trustee of the
         Company in connection with the performance of his duties relating to
         the affairs of the Company in such capacity as an Outside Trustee of
         the Company, and costs relating to the performance by any officer of
         the Company,  performing  duties on behalf  of the  funds  apart  from
         such  office, all in accordance with Section 3.1 (a) hereof;

                   (f)     All brokers' commissions and other costs incurred in
         connection  with the execution of the funds' portfolio transactions;

                   (g)     All taxes and other  costs  payable  by or on behalf
         of the funds to  federal,  state or  other governmental agencies;

                   (h)     All costs of printing, recording and transferring
         certificates representing Interests;

                   (i)     All  costs in connection with the registration of the
         funds and the Interests  with the  Securities  and Exchange  Commission
         ("SEC"),  and the continuous  maintenance of the  effectiveness of such
         registrations,  and the registration and  qualification of Interests of
         the funds  under state or other  securities  laws,  including,  without
         limitation,  the preparation  and printing of registration  statements,
         prospectuses  and statements of additional  information for filing with
         the SEC and other authorities;

                   (j)     All costs of  preparing,  printing and mailing
         prospectuses,  statements  of additional information and reports to
         holders of Interests;

                   (k)     All costs of shareholders' and Trustees' meetings
         and of preparing, printing and mailing all information  and  documents,
         including without  limitation all notices,  financial reports and proxy
         materials, to holders of Interests;

                   (l)    All  costs of legal counsel for the  Company  and for
         Trustees  of the  Company in  connection  with the  rendering  of legal
         advice to or on behalf of the  funds,  including,  without  limitation,
         legal  services  rendered  in  connection  with the  funds'  existence,
         corporate and financial  structure and relations with its shareholders,
         registrations and qualifications of securities under federal, state and
         other laws, issues of securities,  expenses which the funds have herein
         assumed whether customary or not, and extraordinary matters, including,
         without limitation,  any litigation involving the Company, Trustees, or
         officers of the Company relating to the affairs of the funds, employees
         or agents of the funds;

                   (m)     All costs of licenses to utilize trademarks,  trade
         names,  service  marks or other proprietary interests;

                   (n)     All costs associated with membership in trade
         associations; and

                   (o)     All  costs  of  filing  annual  and  other  reports
         with the SEC and  other  regulatory authorities.

         In the event that the Adviser provides any of the foregoing services or
pays any of these  expenses,  the funds  promptly  shall  reimburse  the Adviser
therefor.

SECTION 5.           TERM; TERMINATION.

         Section 5.1. This  Agreement  shall  continue in effect,  unless sooner
terminated in accordance with the provisions of Section 5.2, for a period of two
years beginning the date hereof,  and shall continue in effect from year to year
thereafter  (collectively,   the  "Term");  provided,  however,  that  any  such
continuation  shall be  expressly  approved  at  least  annually  either  by the
Trustees,  including a majority of the  Trustees  who are not parties  hereto or
Interested  Persons of any such party,  cast at a meeting called for the purpose
of  voting  on  such  renewal,  or the  affirmative  vote of a  majority  of the
Outstanding  Voting  Securities (as such term is defined in Section  2(a)(42) of
the 1940 Act) of the funds.

                   (a) Any  continuation  of this Agreement  pursuant to Section
         5.1 hereof shall be deemed to be specifically approved if such approval
         occurs:

                            (i) with respect to the first  continuation  hereof,
                  during the 60 days prior to and  including  the earlier of (A)
                  the  date  specified   herein  for  the  termination  of  this
                  Agreement in the absence of such  approval,  or (B) the second
                  anniversary of the execution of this Agreement; and

                           (ii)  with  respect  to any  subsequent  continuation
                  hereof,  during the 60 days prior to and  including  the first
                  anniversary  of the date upon which the most  recent  previous
                  annual continuance of this Agreement became effective; or

                          (iii) at such other date or time provided in or
                  permitted  by Rule 15a-2 under the 1940 Act.

         Section 5.2.    This Agreement may be terminated at any time, without
penalty, as follows:

                   (a) By a majority of the  Trustees of the Company who are not
         parties  hereto or  Interested  Persons  of any such  party,  or by the
         affirmative vote of a majority of the Outstanding  Voting Securities of
         the Company, upon at least 60 days' prior written notice to the Adviser
         at its principal place of business; and

                   (b) By the  Adviser,  upon at least 60  days'  prior  written
         notice to the Company at its principal place of business.

SECTION 6.           BROKERS AND BROKERAGE COMMISSIONS.

         Section 6.1. For purposes of this Agreement, brokerage commissions paid
by the funds upon the purchase or sale of the funds' portfolio  securities shall
be  considered a cost of  securities of the funds and shall be paid by the funds
in accordance with Section 4.1(e) hereof.

         Section 6.2. The Adviser shall place funds portfolio  transactions with
brokers and dealers who render  satisfactory  service in the execution of orders
at the most  favorable  prices and at  reasonable  commission  rates;  provided,
however, that the Adviser may pay a broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another
broker or dealer  would have  charged for  effecting  such  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, in terms of either that particular  transaction or the overall
responsibilities of the Adviser.

         Section 6.3. In placing portfolio  business with  broker-dealers for or
on behalf of the funds,  the Adviser shall seek the best  execution of each such
transaction,  and all such  brokerage  placements  shall be consistent  with the
Rules of Conduct of NASD Regulation,  Inc.  Notwithstanding  the foregoing,  the
funds  shall  retain  the  right  to  direct  the  placement  of  all  portfolio
transactions  for or on behalf of the funds,  and, in furtherance  thereof,  the
funds may establish  policies or guidelines to be followed by the Adviser in its
placement  of the  funds'  portfolio  transactions  pursuant  to  the  foregoing
provisions.  The Adviser shall report to the Trustees of the Company at least on
a quarterly basis regarding the placement of the funds' portfolio transactions.

         Section  6.4.  The  Adviser  shall not deal with any  affiliate  in any
transaction hereunder in which such affiliate acts as a principal, nor shall the
Adviser,  in rendering  services to the funds hereunder,  execute any negotiated
trade with any affiliate if execution  thereof involves such affiliate's  acting
as a  principal  with  respect  to any part of an order  for or on behalf of the
funds.

SECTION 7.           ASSIGNMENT.

         This  Agreement  may not be  assigned  by  either  party  hereto.  This
Agreement shall terminate  automatically in the event of any assignment (as such
term is defined in Section 2(a)(4) of the 1940 Act). Any attempted assignment of
this Agreement shall be of no force and effect.

SECTION 8.           AMENDMENTS.

         This Agreement may be amended in writing signed by both parties hereto;
provided,  however, that no such amendment shall be effective unless approved by
a  majority  of the  Trustees  of the  Company  who are not  parties  hereto  or
Interested Persons of any such party cast at a meeting called for the purpose of
voting  on such  amendment  and by the  affirmative  vote of a  majority  of the
Outstanding Voting Securities of the funds.

SECTION 9.           LIABILITY.

         The Adviser, its partners, directors,  officers, employees, and certain
other persons  performing  specific  functions for a fund will only be liable to
the fund for  losses  resulting  from  willful  misfeasance,  bad  faith,  gross
negligence,  or reckless  disregard  of their  obligations  and duties under the
Agreement.

SECTION 10.          SECTION 817(h) DIVERSIFICATION.

         The  Adviser is  responsible  for  compliance  with the  provisions  of
Section  817(h) of the  Internal  Revenue  Code of 1986,  as  amended  ("Code"),
applicable to each fund (relating to the diversification requirements applicable
to investments in underlying variable annuity contracts).

SECTION 11.          GOVERNING LAW.

         This Agreement  shall be governed by, and construed and  interpreted in
accordance  with,  the laws of the State of Illinois,  without  reference to the
conflict of laws provisions thereof.  In the event of any inconsistency  between
this Agreement and the 1940 Act, the 1940 Act shall govern, and the inconsistent
provisions  of  this  Agreement  shall  be  construed  so as to  eliminate  such
inconsistency.

SECTION 12.          NON-LIABILITY OF CERTAIN PERSONS.

         The Declaration of Trust (the "Declaration") for the Company is on file
with the  Secretary  of  State of the  Commonwealth  of  Massachusetts,  and the
Declaration  was, and this agreement is, executed or made by or on behalf of the
Company by the Trustees or officers and not individually. The obligations of the
Declaration  and this  agreement  are not binding upon any  Trustee,  officer or
Shareholder of the Company individually and are binding only upon the assets and
property of the Company.

SECTION 13.          USE OF ADVISER'S NAME.

         The  Company  may use the name  "First  Defined  Sector  Fund"  and the
Portfolio  names  listed in Schedule A or any other name  derived  from the name
"First  Trust" or "Nike  Securities"  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 the business of
Adviser as investment  adviser. At such time as this Agreement or any extension,
renewal or amendment  hereof, or such other similar agreement shall no longer be
in effect,  the Company  will cease to use any name derived from the name "First
Trust" or "Nike  Securities" or otherwise  connected  with Adviser,  or with any
organization  which shall have  succeeded  to Adviser's  business as  investment
adviser.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date first above written.

                                                      FIRST DEFINED SECTOR FUND

                                                      By ______________________

                                                        Name:  James A. Bowen
                                                        Title:  President



                                                      FIRST TRUST ADVISORS L.P.

                                                      By ______________________

                                                        Name:  Ronald McAlister
                                                        Title:  President


                                   SCHEDULE A

1.       First Trust Financial Services Portfolio

2.       First Trust Life Sciences Portfolio

3.       First Trust Technology Portfolio


                                   SCHEDULE B

                                                       FEE RATE
                                                    (based on average
                                                    daily net assets)
                                                    _________________
1.    First Trust Financial Services Portfolio           0.60%
2.    First Trust Life Sciences Portfolio                0.60%
3.    First Trust Technology Portfolio                   0.60%



© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission