exhibit d(1)
FORM OF
INVESTMENT ADVISORY AGREEMENT
BETWEEN
CRM MUTUAL FUND TRUST
AND
XXXXXX XXXXXXXXX XXXXXXX, LLC
THIS INVESTMENT ADVISORY AGREEMENT (this "Agreement") made this ___ day of
_________, 2005, by and between CRM Mutual Fund Trust a Delaware statutory trust
(the "Trust"), and Xxxxxx Xxxxxxxxx XxXxxxx, LLC, a limited liability
corporation organized under the laws of the state of New York (the "Adviser").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company, and
offers for sale distinct series of shares of beneficial interest each
corresponding to a distinct portfolio (each a "Fund" and collectively, the
"Funds"); and
WHEREAS, the Trust desires to avail itself of the services, information,
advice, assistance and facilities of an investment adviser on behalf of one or
more Funds of the Trust, and to have that investment adviser provide or perform
for each Fund various research, statistical and investment services; and
WHEREAS, the Adviser is willing to furnish such services to the Trust with
respect to each of the Funds listed on Schedule A to this Agreement on the terms
and conditions hereinafter set forth;
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. The Trust 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 trustees and the officers of the
Trust, 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. This
Agreement shall not create any partnership, employment relationship, or joint
venture between the Trust or any Fund and the Adviser.
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 Fund's investment objective, policies and
limitations as provided in (1) its Prospectus and Statement of Additional
Information (the "Prospectus") and other governing instruments, as amended from
time to time, and (2) any other directions and policies which the Board of
Trustees of the Trust ("Trustees") may issue to the Adviser from time to time
(clause (1) and (2) together with respect to a Fund; its "Investment
Parameters").
(ii) The Adviser is authorized, in its discretion and without
prior consultation with the Trust, to purchase and sell for each Fund,
securities and other investments consistent with the Fund's Investment
Parameters.
B. CORPORATE MANAGEMENT SERVICES.
(i) The Adviser shall furnish for the use of the Funds office
space and all office facilities, equipment and personnel necessary for servicing
the investments of the Funds.
(ii) The Adviser shall pay the salaries of all personnel hired
by the Funds with the approval of the Adviser and all personnel of the Adviser
performing services relating to research, statistical and investment activities
on behalf of the Funds.
C. PROVISION OF INFORMATION NECESSARY FOR PREPARATION OF REGISTRATION
STATEMENT, AMENDMENTS AND OTHER MATERIALS. The Adviser will make available and
provide such information as the Trust and/or its administrator(s) 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 has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-1
under the Investment Advisers Act of 1940, as amended, and will provide the
Trust, on the date of this Agreement, a copy of the code of ethics and evidence
of its adoption. An executive officer of the Adviser shall furnish to the
Trustees any reports required under Rule 17j-1 under the 1940 Act.
E. DISQUALIFICATION. The Adviser shall immediately notify the Trustees
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 Trustees and officers of the Trust for
consultation and discussion regarding the management of each Fund and its
investment activities.
3. EXECUTION AND ALLOCATION OF PORTFOLIO BROKERAGE.
A. The Adviser, subject to the control and direction of the Trustees,
shall have authority and discretion to select brokers and dealers to execute
portfolio transactions for each Fund, 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 seek to obtain
best execution when selecting brokers and dealers to execute a portfolio
transaction for a Fund.
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 any Fund and for other clients of the Adviser 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 the Trust and to its other
clients.
D. It is understood that the Adviser may, in its discretion and
subject to applicable law, use brokers who provide the Adviser with research,
analysis, advice and related services to execute portfolio transactions on
behalf of the Funds, 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 each 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 are
affiliated with the Adviser provided that (i) no such broker will be utilized
in any transaction in which such broker acts as principal; and (ii) the
commissions, fees or other remuneration received by such brokers is reasonable
and fair compared to the commission, 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. Subject to the control and direction of the Trustees, the Adviser
shall have the authority to exercise all of the rights of each Fund as owner of
any securities which might be exercised by any individual owning such
securities in such individual's own right, including but not limited to, the
rights to vote by proxy for any and all purposes, to consent to the
reorganization, merger or consolidation of any company or to consent to the
sale, lease or mortgage of all or substantially all of the property and assets
of any company, and to exchange any of the shares of stock of any company for
the shares of stock issued therefor upon any such reorganization, merger,
consolidation, sale lease or mortgage.
G. The Adviser shall provide such reports as the Trustees may
reasonably request with respect to each Fund's total brokerage and portfolio
transaction activities and the manner in which that business was allocated.
4. DELEGATION OF ADVISER'S OBLIGATIONS AND SERVICES. With respect to any or
all Funds, the Adviser may enter into one or more contracts (each, a
"Sub-Advisory Agreement") with a sub-adviser in which the Adviser delegates to
such sub-adviser any or all of its obligations or services specified in Section
2 of this Agreement, provided that each Sub-Advisory Agreement imposes on the
sub-adviser bound thereby all the duties and conditions the Adviser is subject
to under this Agreement, and further provided that each Sub-Advisory Agreement
meets all requirements of the 1940 Act and rules thereunder.
5. EXPENSES OF THE TRUST. 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
limitation:
A. fees payable for administrative services;
B. fees payable for compliance services;
C. fees payable for accounting services;
D. the cost of obtaining quotations for calculating the value of the
assets of each Fund;
E. interest and taxes;
F. brokerage commissions, dealer spreads and other costs in connection
with the purchase or sale of securities;
G. compensation and expenses of its Trustees other than those who are
"interested persons" of the Trust within the meaning of the 1940 Act;
H. legal and audit expenses;
I. fees and expenses related to the registration and qualification of
the Trust and its shares for distribution under state and federal securities
laws;
J. expenses of typesetting, printing and mailing reports, notices and
proxy material to shareholders of the Trust;
K. all other expenses incidental to holding meetings of the Trust's
shareholders, including proxy solicitations therefor;
L. premiums for fidelity bond and other insurance coverage;
M. the Trust's association membership dues;
N. expenses of typesetting for printing Prospectuses;
O. expenses of printing and distributing Prospectuses to existing
shareholders;
P. out-of-pocket expenses incurred in connection with the provision of
custodial and transfer agency service;
Q. service fees payable by any Fund for providing personal services to
the shareholders of the Fund and for maintaining and servicing shareholder
accounts for those shareholders;
R. distribution fees; and
S. such non-recurring expenses as may arise, including costs arising
from threatened legal actions, suits and proceedings to which the Trust is a
party and the legal obligation which the Trust may have to indemnify its
Trustees and officers with respect thereto.
6. COMPENSATION OF THE ADVISER. For the services and facilities to be
furnished hereunder, the Adviser shall receive advisory fees calculated at the
annual rates listed along with each Fund's name in Schedule B attached hereto.
The aggregate of such advisory fees for all Funds shall be payable monthly as
soon as practicable after the last day of each month based on each Fund's
average daily net assets.
7. ACTIVITIES AND AFFILIATES OF THE ADVISER.
A. The services of the Adviser to the Trust are not to be deemed
exclusive, and the Adviser is 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 Adviser's ability to meet all of its obligations with respect to rendering
services to the Trust hereunder.
B. The Trust 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 Section 3 of this Agreement, the Trust 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 one or
more Funds, provided that the Adviser acts in good faith. The Trust 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 one or more Funds may have an interest. The Adviser shall have no
obligation to recommend for any Fund a position in any investment which an
Affiliated Account may acquire, and the Trust shall have no first refusal,
co-investment or other rights in respect of any such investment, either for its
Funds or otherwise.
C. Subject to and in accordance with the Agreement and Declaration of
Trust of the Trust and By-Laws of the Trust as currently in effect and the 1940
Act and the rules thereunder, it is understood that Trustees, officers and
agents of the Trust and shareholders of the Trust are or may be interested in
the Adviser or its "affiliated persons" as directors, officers, agents or
shareholders of the Adviser or its "affiliated persons"; that directors,
officers, agents and shareholders of the Adviser or its "affiliated persons" are
or may be interested in the Trust as trustees, officers, agents, shareholders or
otherwise; that the Adviser or its "affiliated persons" may be interested in the
Trust as shareholders or otherwise; and that the effect of any such interests
shall be governed by said Agreement and Declaration of Trust, By-Laws and the
1940 Act and the rules thereunder.
8. LIABILITIES OF THE ADVISER. 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 or any 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 the making of any investment for or on behalf of a
Fund. As used in this Section 8, the term "Adviser" shall include managers,
officers and employees of the Adviser as well as the Adviser itself.
9. EFFECTIVE DATE; TERM. This Agreement shall become effective on the date
first written above and shall remain in force for a period of two years from
such date, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the Trustees,
including the vote of a majority of the Trustees who are not "interested
persons" of the Trust, cast in person at a meeting called for the purpose of
voting on such approval, or by vote of a majority of the outstanding voting
securities. The aforesaid provision shall be construed in a manner consistent
with the 1940 Act and the rules and regulations thereunder.
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 shall notify the Trust in writing in advance of any
proposed change of "control" to enable the Trust to take the steps necessary to
enter into a new advisory agreement.
11. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement between the Adviser and the Trust, which amendment is subject
to the approval of the Trustees and, where required by the 1940 Act, the
shareholders of any affected Fund 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 the
Trust with respect to any Fund (by vote of the Trustees or by "vote of a
majority of the outstanding voting securities" of the Fund) on sixty (60) days'
written notice to the Adviser;
B. shall immediately terminate in the event of its "assignment"; and
C. may be terminated with respect to any Fund by the Adviser on
sixty(60) days' written notice to the Trust.
13. DEFINITIONS. As used in this Agreement, the terms "affiliated person,"
"assignment," "control," "interested person" 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.
14. 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.
15. 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.
16. GOVERNING LAW. To the extent that state law has not been preempted by
the provisions of any law of the United States heretofore or hereafter enacted,
as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the state of
Delaware.
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.
CRM MUTUAL FUND TRUST, on behalf of
its series listed on Schedule A hereto
By: _____________________________________
Name:
Title:
XXXXXX XXXXXXXXX XXXXXXX, LLC
By: _____________________________________
Name:
Title:
SCHEDULE A
DATED [INSERT]
TO
ADVISORY AGREEMENT
DATED [INSERT]
BETWEEN
CRM MUTUAL FUND TRUST
AND
XXXXXX XXXXXXXXX XXXXXXX, LLC
CRM Small Cap Value Fund
CRM Small/Mid Cap Value Fund
CRM Mid Cap Value Fund
CRM Large Cap Value Fund
SCHEDULE B
DATED [INSERT]
TO
ADVISORY AGREEMENT
DATED [INSERT]
BETWEEN
CRM MUTUAL FUND TRUST
AND
XXXXXX XXXXXXXXX XXXXXXX, LLC
FEE SCHEDULE
FUND ANNUAL FEE AS A % OF
AVERAGE DAILY NET ASSETS
CRM Small Cap Value Fund .75% of the Fund's first $1 billion of
average daily net assets; .70% of the
Fund's next $1 billion of average daily
net assets; and .65% of the Fund's
average daily net assets over $2 billion.
CRM Small/Mid Cap Value Fund .75% of the Fund's first $1 billion of
average daily net assets; .70% of the
Fund's next $1 billion of average daily
net assets; and .65% of the Fund's
average daily net assets over $2 billion.
CRM Mid Cap Value Fund .75% of the Fund's first $1 billion of
average daily net assets; .70% of the
Fund's next $1 billion of average daily
net assets; and .65% of the Fund's
average daily net assets over $2 billion.
CRM Large Cap Value Fund .55% of the Fund's first $1 billion of
average daily net assets; .50% of the
Fund's next $1 billion of average daily
net assets; and .45% of the Fund's
average daily net assets over $2 billion.
