FORM OF
INVESTMENT ADVISORY AGREEMENT
December 11, 1997
Travelers Investment Management Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-000
Dear Sirs:
This Investment Advisory Agreement (the "Agreement") is made on this
11th day of December, 1997, by and between Xxxxx Xxxxxx Investment Trust, a
business trust organized under the laws of the Commonwealth of Massachusetts
(the "Trust"), in respect of its sub-trust, Xxxxx Xxxxxx S&P 500 Index Fund
(the "Fund"), and Travelers Investment Management Company ("TIMCO") as
follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified
in: (i) the Trust's Master Trust Agreement, as amended from time to time
(the "Master Trust Agreement"); (ii) the Fund's Prospectus (the
"Prospectus"); and (iii) the Fund's Statement of Additional Information
(the "Statement") filed with the Securities and Exchange Commission (the
"SEC") as part of the Fund's Registration Statement on Form N-lA, as
amended from time to time, and in such manner and to such extent as may
from time to time be approved by the Board of Trustees of the Trust (the
"Board"). Copies of the Fund's Prospectus and the Statement and the
Trust's Master Trust Agreement have been or will be submitted to TIMCO.
The Trust desires to employ and hereby appoints TIMCO to act as
investment adviser for the Fund. TIMCO accepts the appointment and
agrees to furnish the services for the compensation set forth below.
TIMCO is hereby authorized to retain third parties and is hereby
authorized to delegate some or all of its duties and obligations
hereunder to such persons, provided such persons shall remain under the
general supervision of TIMCO.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board, TIMCO will: (a)
manage the Fund's portfolio in accordance with the Fund's investment
objective and policies as stated in the Prospectus and the Statement;
(b) make investment decisions for the Fund; (c) place purchase and sale
orders for portfolio transactions for the Fund; and (d) employ
professional portfolio managers and securities analysts to provide
research services to the Fund. In providing those services, TIMCO will
conduct a continual program of investment, evaluation and, if
appropriate, sale and reinvestment of the Fund's assets.
3. Compensation
In consideration of the services rendered pursuant to this Agreement,
the Trust will pay TIMCO, on the first business day of each month, a fee
for the previous month at an annual rate of 0.15% of the Fund's average
daily net assets. The fee for the period from the date the Fund
commences its investment operations to the end of the month during which
the Fund commences its investment operations shall be pro-rated
according to the proportion that such period bears to the full monthly
period. Upon any termination of this Agreement before the end of any
month, the fee for such part of that month shall be pro-rated according
to the proportion that such period bears to the full monthly period and
shall be payable upon the date of termination of this Agreement. For
the purpose of determining fees payable to TIMCO, the value of the
Fund's net assets shall be computed at the times and in the manner
specified in the Fund's Prospectus and/or the Statement, as from time to
time in effect.
4. Expenses
TIMCO will bear all expenses in connection with the performance of its
services under this Agreement. The Fund will bear certain other
expenses to be incurred in its operation, including: investment advisory
and administration fees; charges of custodians and transfer and dividend
disbursing agents; fees for necessary professional services, such as the
Fund's and Board members' proportionate share of insurance premiums,
professional associations, dues and/or assessments; and brokerage
services, including taxes, interest and commissions; costs of preparing
and printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders; the
costs of regulatory compliance, such as SEC fees and state blue sky
qualifications fees; outside auditing and legal expenses and costs
associated with maintaining the Fund's legal existence; costs of
shareholders' reports and meetings of the officers or Board; fees of the
members of the Board who are not officers, directors or employees of
Xxxxx Xxxxxx, Inc. or its affiliates or any person who is an affiliate
of any person to whom duties may be delegated hereunder.
5. Reimbursement to the Fund
If in any fiscal year the aggregate expenses of the Fund (including fees
pursuant to this Agreement, but excluding distribution fees, interest,
taxes, brokerage and, if permitted by state securities commissions,
extraordinary expenses) exceed the expense limitations of any state
having jurisdiction over the Fund, TIMCO will reimburse the Fund for
that excess expense to the extent required by state law in the same
proportion as its respective fees bear to the combined fees for
investment advice and administration. The expense reimbursement
obligation of TIMCO will be limited to the amount of its fees hereunder.
Such expense reimbursement, if any, will be estimated, reconciled and
paid on a monthly basis.
6. Brokerage
In selecting brokers or dealers to execute transactions on behalf of the
Fund, TIMCO will seek the best overall terms available. In assessing
the best overall terms available for any transaction, TIMCO will
consider factors it deems relevant, including, but not limited to, the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer and
the reasonableness of the commission, if any, for the specific
transaction and on a continuing basis. In selecting brokers or dealers
to execute a particular transaction, and in evaluating the best overall
terms available, TIMCO is authorized to consider the brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934, as amended) provided to the Fund and/or
other accounts over which TIMCO or its affiliates exercise investment
discretion.
7. Information Provided to the Fund
TIMCO will keep the Trust informed of developments materially affecting
the Fund's portfolio, and will, on its own initiative, furnish the Trust
from time to time with whatever information TIMCO believes is
appropriate for this purpose.
8. Standard of Care
TIMCO shall exercise its best judgment in rendering the services listed
in paragraph 2 above. TIMCO shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, provided
that nothing in this Agreement shall be deemed to protect or purport to
protect TIMCO against any liability to the Trust or to the Fund's
shareholders to which TIMCO would otherwise be subject by reason of
willful malfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of TIMCO 's reckless disregard of
its obligations and duties under this Agreement.
9. Services to Other Companies or Accounts
The Trust understands that TIMCO now acts, will continue to act and may
act in the future as: investment adviser to fiduciary and other managed
accounts, as well as to other investment companies; and the Trust has no
objection to TIMCO's so acting, provided that whenever the Fund and one
or more other investment companies advised by TIMCO have available funds
for investment, investments suitable and appropriate for each will be
allocated in accordance with a formula believed to be equitable to each
company. The Trust recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for the Fund. In
addition, the Trust understands that the persons employed by TIMCO to
assist in the performance of TIMCO's duties under this Agreement will
not devote their full time to such service and nothing contained in this
Agreement shall be deemed to limit or restrict the right of TIMCO or any
affiliate of TIMCO to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
10. Term of Agreement
This Agreement shall become effective as of the date the Fund commences
its investment operations and continue for an initial two-year term and
shall continue thereafter so long as such continuance is specifically
approved at least annually by (i) the Board or (ii) a vote of a
"majority" (as defined in the Investment Company Act of 1940, as amended
(the "1940 Act")) of the Fund's outstanding voting securities, provided
that in either event the continuance is also approved by a majority of
the Board who are not "interested persons" (as defined in the 0000 Xxx)
of any party to this Agreement, by vote cast in person or by proxy at a
meeting called for the purpose of voting on such approval. This
Agreement is terminable, without penalty, on 60 days' written notice, by
the Board or by vote of holders of a majority of the Fund's shares, or
upon 90 days' written notice, by TIMCO. This Agreement will also
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
11. Representation by the Trust
The Trust represents that a copy of the Master Trust Agreement is on
file with the Secretary of the Commonwealth of Massachusetts and with
the City of Boston.
12. Limitation of Liability
The Trust and TIMCO agree that the obligations of the Trust under this
Agreement shall not be binding upon any of the Board members,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Trust individually, but are binding only upon
the assets and property of the Fund, as provided in the Master Trust
Agreement. The execution and delivery of this Agreement have been duly
authorized by the Trust and TIMCO, and signed by an authorized officer
of each, acting as such. Neither the authorization by the Board members
of the Trust, nor the Trust execution and delivery by the officer of the
Trust shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only
the assets and property of the Fund as provided in the Master Trust
Agreement.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by signing and returning the enclosed copy of
this Agreement to us.
Very truly yours,
Xxxxx Xxxxxx Investment Trust,
on behalf of
Xxxxx Xxxxxx S&P 500 Index Fund.
By:
Title:
Accepted:
Travelers Investment Management Company
By: Title:
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