Exhibit (d)(4)
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
between
XXXXXX XXXXXX SELECT FUND, INC.
and
XXXXXX ASSET MANAGEMENT, INC.
This Agreement is made this ____ day of ______________, 2000 (the
"Agreement"), by and between Xxxxxx Xxxxxx Select Fund, Inc., a Maryland
corporation ("Xxxxxx Xxxxxx Select"), and Xxxxxx Asset Management, Inc., a
Tennessee corporation ("Adviser").
WHEREAS, Xxxxxx Xxxxxx Select is registered under the Investment Company
Act of 1940, as amended ("1940 Act") as an open-end management investment
company, and offers for sale the series of shares of common stock designated
Xxxxxx Xxxxxx Utility Fund and Xxxxxx Xxxxxx Core Equity Fund (each a "Fund" and
collectively the "Funds"); and
WHEREAS, Xxxxxx Xxxxxx Select desires on behalf of each Fund to avail
itself of the services, information, advice, assistance and facilities of an
investment adviser, and to have that investment adviser provide or perform for
each Fund various research, statistical and investment services;
NOW, THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties as follows:
1. EMPLOYMENT OF THE ADVISER. Xxxxxx Xxxxxx Select hereby employs the
Adviser to invest and reinvest the assets of each Fund in the manner set forth
in Section 2 of this Agreement subject to the direction of the Board of
Directors (the "Board") and the officers of Xxxxxx Xxxxxx Select, for the
period, in the manner, and on the terms set forth hereinafter. The Adviser
hereby accepts such employment and agrees during such period to render the
services and to assume the obligations herein set forth. The Adviser shall for
all purposes herein be deemed to be an independent contractor and shall, except
as expressly provided or authorized (whether herein or otherwise), have no
authority to act for or represent Xxxxxx Xxxxxx Select in any way or otherwise
be deemed an agent of Xxxxxx Xxxxxx Select.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE ADVISER. The Adviser
undertakes to provide the services hereinafter set forth and to assume the
following obligations:
A. INVESTMENT ADVISORY SERVICES.
(i) The Adviser shall direct the investments of each Fund,
subject to and in accordance with the respective Fund's investment
objective(s), policies and limitations as provided in its Prospectus
(the "Prospectus") and Statement of Additional Information ("SAI") and
other governing instruments, as amended from time to time, and any
other directions and policies which the Board may issue to the Adviser
from time to time.
(ii) The Adviser is authorized, in its discretion and without
prior consultation with Xxxxxx Xxxxxx Select, to purchase and sell
securities and other investments for each Fund.
(iii) The Adviser is authorized, in its discretion, to pursue the
investment objective(s) of each Fund by investing substantially all
investable assets of each Fund into another registered investment
company with the same investment objective(s) as the respective Fund,
subject to the approval of the Board.
B. ADMINISTRATION SERVICES.
(i) The Adviser will supervise all aspects of the operations of
the Funds, including the oversight of transfer agency and custodial
services, except as hereinafter set forth; provided, however, that
nothing herein contained shall be deemed to relieve or deprive the
Board of its responsibility for control of the conduct of the affairs
of the Funds.
(ii) The Adviser shall furnish for the use of Xxxxxx Xxxxxx
Select, office space and all necessary office facilities, equipment
and personnel for servicing the investments of Xxxxxx Xxxxxx Select.
(iii) The Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the
Funds' proxy material, tax returns and required reports with or to the
Funds' shareholders, the Securities and Exchange Commission and other
appropriate federal or state regulatory authorities.
(iv) The Adviser shall pay the salaries of all personnel of
Xxxxxx Xxxxxx Select or the Adviser performing services relating to
research, statistical and investment activities.
C. PROVISION OF INFORMATION NECESSARY FOR PREPARATION OF REGISTRATION
STATEMENT, AMENDMENTS AND OTHER MATERIALS. The Adviser will make available
and provide such information as Xxxxxx Xxxxxx Select may reasonably request
for use in the preparation of its registration statement, reports and other
documents required by any applicable federal, foreign or state statutes or
regulations.
D. CODE OF ETHICS. The Adviser will adopt a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and
Section 204A of the Investment Advisers Act of 1940 and will provide Xxxxxx
Xxxxxx Select with a copy of the code of ethics and evidence of its
adoption. Within forty-five (45) days of the end of the last calendar
quarter of each year while this Agreement is in effect, an executive
officer of the Adviser shall certify to the Board that the Adviser has
complied with the requirements of Rule 17j-1 and Section 204A during the
previous year and that there has been no violation of the Adviser's code of
ethics or, if such a violation has occurred, that appropriate action was
taken in response to such violation. Upon the written request of Xxxxxx
Xxxxxx Select or its
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administrator, the Adviser shall permit Xxxxxx Xxxxxx Select to examine the
reports required to be made to the Adviser by Rule 17j-l(c)(l) and all
other records relevant to the Adviser's code of ethics.
E. DISQUALIFICATION. The Adviser shall immediately notify the Board of
the occurrence of any event which would disqualify the Adviser from serving
as an investment adviser of an investment company pursuant to Section 9 of
the 1940 Act or any other applicable statute or regulation.
F. OTHER OBLIGATIONS AND SERVICES. The Adviser shall make its officers
and employees available to the Board and officers of Xxxxxx Xxxxxx Select
for consultation and discussion regarding the management of each Fund and
its investment activities.
3. EXECUTION AND ALLOCATION OF FUND BROKERAGE.
A. The Adviser, subject to the control and direction of the Board,
shall have authority and discretion to select brokers and dealers to
execute transactions for the Funds, and for the selection of the markets on
or in which the transactions will be executed.
B. In acting pursuant to Section 3A, the Adviser will place orders
through such brokers or dealers in conformity with the policies with
respect to transactions for the Funds set forth in Xxxxxx Xxxxxx Select's
registration statement. In no instance will securities of a Fund be
purchased from or sold to the Adviser, or any affiliated person thereof,
except in accordance with the federal securities laws and the rules and
regulations thereunder.
C. It is understood that the Adviser may, to the extent permitted by
applicable laws and regulations, aggregate securities to be sold or
purchased for a Fund and for other clients in order to obtain the most
favorable price and efficient execution. In that event, allocation of the
securities purchased or sold, as well as expenses incurred in the
transaction, will be made by the Adviser in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to Xxxxxx
Xxxxxx Select and to its other clients. Xxxxxx Xxxxxx Select recognizes
that in some cases this procedure may adversely affect the results obtained
for a Fund.
D. It is understood that the Adviser may, in its discretion, use
brokers (including brokers that may be affiliates of the Adviser to the
extent permitted by section 3(E) hereof) who provide a Fund with research,
analysis, advice and similar services to execute transactions on behalf of
the Fund, and the Adviser may pay to those brokers in return for brokerage
and research services a higher commission than may be charged by other
brokers, subject to the Adviser determining in good faith that such
commission is reasonable in terms either of the particular transaction or
of the overall responsibility of the Adviser to such Fund and its other
clients and that the total commissions paid by such Fund will be reasonable
in relation to the benefits to the Fund over the long term.
E. It is understood that the Adviser may use brokers who (i) are
affiliated with the Adviser provided that no such broker will be utilized
in any transaction in which such
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broker acts as principal; and (ii) the commissions, fees or other
remuneration received by such brokers is reasonable and fair compared to
the commissions, fees or other remuneration paid to other brokers in
connection with comparable transactions involving similar securities being
purchased or sold during a comparable period of time.
F. The Adviser will maintain all books and records required to be
maintained pursuant to the 1940 Act and the rules and regulations
promulgated thereunder with respect to actions by the Adviser on behalf of
the Funds, and will furnish the Board with such periodic and special
reports as the Board reasonably may request. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees
that all records that it maintains for the Fund are the property of Xxxxxx
Xxxxxx Select, agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any records that it maintains for Xxxxxx Xxxxxx Select
and that are required to be maintained by Rule 31a-1 under the 1940 Act,
and further agrees to surrender promptly to Xxxxxx Xxxxxx Select any
records that it maintains for the Funds upon request by Xxxxxx Xxxxxx
Select.
4. DELEGATION OF ADVISER'S DUTIES. With respect to Xxxxxx Xxxxxx Select and
the Funds, Adviser may enter into one or more contracts ("Sub-Advisory
Contracts" or "Sub-Administration Contracts") with a sub-adviser or
sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraphs 2 of this Contract, provided that: (i) each Sub-Advisory Contract and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the corresponding duties and conditions to which Adviser is
subject with respect to the delegated services under Paragraphs 2 and 3 of this
Contract; (ii) each Sub-Advisory Contract and Sub-Administration Contract meets
all requirements of the 1940 Act and rules thereunder, and (iii) Adviser shall
not enter into a Sub-Advisory Contract or Sub-Administration Contract unless it
is approved by the Board prior to implementation.
5. EXPENSES. During the term of this Agreement, each Fund will bear all
expenses, not specifically assumed by the Adviser, incurred in its operations
and the offering of its shares. Expenses borne by the Fund will include but not
be limited to the following: legal and audit expenses, organizational expenses;
interest; taxes; governmental fees; fees, voluntary assessments and other
expenses incurred in connection with membership in investment company
organizations; the cost (including brokerage commissions or charges, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; fees of custodians, transfer agents, registrars or other agents;
distribution fee; expenses of preparing share certificates; expenses relating to
the redemption or repurchase of shares; expenses of registering and qualifying
shares for sale under applicable federal and state law and maintaining such
registrations and qualifications; expenses of preparing, setting in print,
printing and distributing prospectuses, proxy statements, reports, notices and
dividends to shareholders; cost of stationery; costs of stockholders and other
meetings of Xxxxxx Xxxxxx Select; compensation and expenses of the independent
directors of Xxxxxx Xxxxxx Select; and Xxxxxx Xxxxxx Select's pro rata portion
of premiums of any fidelity bond and other insurance covering Xxxxxx Xxxxxx
Select and its officers and directors.
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6. COMPENSATION OF THE ADVISER. For the services and facilities to be
furnished and expenses assumed hereunder, the Adviser shall receive from each
Fund an advisory fee at the annual rate listed in Schedule A attached hereto.
7. ACTIVITIES AND AFFILIATES OF THE ADVISER.
A. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Adviser who may also be a director,
officer, or employee of Xxxxxx Xxxxxx Select, to engage in any other
business or to devote his time and attention in part to the management or
other aspects of any other business, whether of a similar nature or a
dissimilar nature, nor to limit or restrict the right of the Adviser to
engage in any other business or to render services of any kind, including
investment advisory and management services, to any other corporation,
firm, individual or association.
B. Xxxxxx Xxxxxx Select acknowledges that the Adviser or one or more
of its "affiliated persons" may have investment responsibilities or render
investment advice to or perform other investment advisory services for
other individuals or entities and that the Adviser, its "affiliated
persons" or any of its or their directors, officers, agents or employees
may buy, sell or trade in securities for its or their respective accounts
("Affiliated Accounts"). Subject to the provisions of paragraph 3, Xxxxxx
Xxxxxx Select agrees that the Adviser or its "affiliated persons" may give
advice or exercise investment responsibility and take such other action
with respect to Affiliated Accounts which may differ from the advice given
or the timing or nature of action with respect to a Fund, provided that the
Adviser acts in good faith. Xxxxxx Xxxxxx Select acknowledges that one or
more of the Affiliated Accounts may at any time hold, acquire, increase,
decrease, dispose of or otherwise deal with positions in investments in
which that Fund may have an interest. The Adviser shall have no obligation
to recommend for the Fund a position in any investment which an Affiliated
Account may acquire, and Xxxxxx Xxxxxx Select shall have no first refusal,
co-investment or other rights in respect of any such investment, either for
its Fund or otherwise.
C. Subject to and in accordance with the Articles of Incorporation and
By-Laws of Xxxxxx Xxxxxx Select as currently in effect and the 1940 Act and
the rules thereunder, it is understood that directors, officers and agents
of Xxxxxx Xxxxxx Select and shareholders of Xxxxxx Xxxxxx Select are or may
be interested in the Adviser or its "affiliated persons," or that
directors, officers, agents and shareholders of the Adviser or its
"affiliated persons" are or may be interested in Xxxxxx Xxxxxx Select; and
that the effect of any such interests shall be governed by said Articles of
Incorporation, By-Laws and the 1940 Act and the rules thereunder.
8. LIABILITIES OF THE ADVISER.
A. Except as provided below, 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 Xxxxxx Xxxxxx Select or to any shareholder of Xxxxxx Xxxxxx
Select or the Funds for any error of judgment or mistake of law in the
course of, or connected with, rendering services hereunder or for any
losses that may be
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sustained by the Fund, Xxxxxx Xxxxxx Select, or its shareholders in
connection with the matters to which this Agreement relates.
B. Nothing in this paragraph shall be deemed a limitation or waiver of
any obligation or duty that may not by law be limited or waived.
9. EFFECTIVE DATE; TERM. This Agreement shall continue in effect for two
years and from year to year thereafter only so long as specifically approved
annually by (i) vote of a majority of the directors of Xxxxxx Xxxxxx Select who
are not parties to this Agreement or interested persons of such parties, cast in
person at a meeting called for that purpose, and (ii) by the Board or by a vote
of a majority of the outstanding voting securities of the Fund.
10. ASSIGNMENT. No "assignment" of this Agreement shall be made by the
Adviser, and this Agreement shall terminate automatically in event of such
assignment. The Adviser will notify Xxxxxx Xxxxxx Select of any change of
control of the Adviser, including any change of its controlling persons or 25%
shareholders, as applicable, and any changes in the key personnel who are either
the portfolio manager(s) of the Funds or senior management of the Adviser, in
each case prior to, or promptly after, such change. The Adviser agrees to bear
all reasonable expenses of the Fund, if any, arising out of such change in
control.
11. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement between the Adviser and Xxxxxx Xxxxxx Select, which amendment
is subject to the approval of the Board and, where required by the 1940 Act, the
shareholders of the Funds in the manner required by the 1940 Act and the rules
thereunder.
12. TERMINATION. This Agreement:
A. may at any time be terminated without payment of any penalty by
Xxxxxx Xxxxxx Select (by vote of the Board or by "vote of a
majority of the outstanding voting securities") on sixty (60)
days' written notice to the Adviser;
B. shall immediately terminate in the event of its "assignment"; and
C. may be terminated by the Adviser on sixty (60) days' written
notice to Xxxxxx Xxxxxx Select.
13. NAME. In the event this Agreement is terminated by either party or upon
written notice from the Adviser at any time, Xxxxxx Xxxxxx Select hereby agrees
that it will eliminate from its corporate name any reference to the name "Xxxxxx
Xxxxxx." Xxxxxx Xxxxxx Select shall have the non-exclusive use of the name
"Xxxxxx Xxxxxx" in whole or in part so long as this Agreement is effective or
until such notice is given.
14. DEFINITIONS. As used in this Agreement, the terms "affiliated person,"
"assignment," "broker," "control," "interested person," "investment adviser,"
"net assets," "sale,"
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"security," "sell" and "vote of a majority of the outstanding voting securities"
shall have the meanings set forth in the 1940 Act and the rules and regulations
thereunder, subject to any applicable orders of exemption issued by the
Securities and Exchange Commission.
15. NOTICE. Any notice under this Agreement shall be given in writing
addressed and delivered or mailed postage prepaid to the other party to this
Agreement at its principal place of business.
16. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
17. GOVERNING LAW. To the extent that state law has not been preempted by
the provisions of any law of the United States, this Agreement shall be
administered, construed and enforced according to the laws of the State of
Maryland.
18. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors. Where the effect of a requirement of the
federal securities laws reflected in any provision of this Agreement is made
less restrictive by a rule, regulation or order of the SEC, whether of special
or general application, such provision shall be deemed to incorporate the effect
of such rule, regulation or order. This Agreement and the Schedule(s) attached
hereto embody the entire agreement and understanding among the parties. This
Agreement may be signed in counterpart.
IN WITNESS WHEREOF the parties have caused this instrument to be signed on
their behalf by their respective officers thereunto duly authorized, and their
respective seals to be hereunto affixed, all as of the date first written above.
XXXXXX XXXXXX SELECT FUND, INC.
(SEAL) By:
-------------------------------------
Name:
Title:
XXXXXX ASSET MANAGEMENT, INC.
(SEAL) By:
-------------------------------------
Name:
Title:
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SCHEDULE A
XXXXXX XXXXXX SELECT FUND, INC.
FEE SCHEDULE
FUND Annualized % of average
DAILY NET ASSETS
Xxxxxx Xxxxxx Core Equity Fund 1.00%
Xxxxxx Xxxxxx Utility Fund 1.00%
This advisory fee shall be payable quarterly as soon as practicable after
the last day of each quarter based on the average of the daily values placed on
the net assets of each respective Fund as determined at the close of business on
each day throughout the quarter. The assets of each Fund will be valued
separately as of the close of regular trading on the New York Stock Exchange
(currently 4:00 p.m., Eastern time) on each business day throughout the quarter
or, if Xxxxxx Xxxxxx Select Fund, Inc. ("Xxxxxx Xxxxxx Select") lawfully
determines the value of the net assets of any Fund as of some other time on each
business day, as of such time with respect to that Fund. The first payment of
such fee shall be made as promptly as possible at the end of the quarter next
succeeding the effective date of this Agreement. In the event that the Adviser's
right to such fee commences on a date other than the last day of the quarter,
the fee for such quarter shall be based on the average daily assets of the Funds
in that period from the date of commencement to the last day of the quarter. If
Xxxxxx Xxxxxx Select determines the value of the net assets of any Fund more
than once on any business day, the last such determination on that day shall be
deemed to be the sole determination on that day. The value of net assets shall
be determined pursuant to the applicable provisions of Xxxxxx Xxxxxx Select's
Articles of Incorporation, its By-Laws and the 1940 Act. If, pursuant to such
provisions, the determination of the net asset value of any Fund is suspended
for any particular business day, then the value of the net assets of the Fund on
that day shall be deemed to be the value of its net assets as determined on the
preceding business day. If the determination of the net asset value of a Fund
has been suspended for more than one quarter, the Adviser's compensation payable
at the end of that quarter 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
quarter).
Xxxxxx Asset Management, Inc. ("Adviser") shall waive [95]% of the advisory
fee for any or both of Xxxxxx Xxxxxx Utility Fund and/or Xxxxxx Xxxxxx Core
Equity Fund (each a "Fund" and collectively the "Funds") that it manages by
investing substantially all of the Fund's investable assets into another
registered investment company.
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