EXHIBIT (5)(c)
XXXXX XXXXX MUTUAL FUNDS TRUST
INVESTMENT ADVISORY AGREEMENT
ON BEHALF OF XXXXX XXXXX TAX-MANAGED EMERGING GROWTH FUND
AGREEMENT made this 16th day of September, 1997, between Xxxxx Xxxxx
Mutual Funds Trust, a Massachusetts business trust (the "Trust"), on behalf of
Xxxxx Xxxxx Tax-Managed Emerging Growth Fund (the "Fund") and Xxxxx Xxxxx
Management, a Massachusetts business trust (the "Adviser").
1. Duties of the Adviser. The Trust hereby employs the Adviser to act
as investment adviser for and to manage the investment and reinvestment of the
assets of the Fund and 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
Agreement.
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 Fund office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund
and for administering its 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 Trust, the Adviser shall
furnish continuously an investment program and shall determine from time to time
what securities and other investments shall be acquired, disposed of 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, to buy, sell, and
otherwise trade in any and all types of securities, commodities and investment
instruments on behalf of the Fund. Should the Trustees of the Trust at any time,
however, make any specific determination as to investment policy for the Fund
and notify the Adviser thereof in writing, the Adviser shall be bound by such
determination 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 Trust, 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 either directly with the issuer
or 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. 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 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 (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 pay any broker or dealer who provides such brokerage and research
services 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 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 any other series of the Trust, or of any one or more investment
companies sponsored by the Adviser or its affiliates.
2. Compensation of the Adviser. For the services, payments and
facilities to be furnished hereunder by the Adviser, the Adviser shall be
entitled to receive from the Trust compensation in an amount equal to the
following of the average daily net assets of the Fund throughout each month:
Average Daily Net Annual Fee Rate
Assets for the Month (For Each Level)
-------------------- ----------------
Up to $500 million 0.625%
$500 million but less than $1 billion 0.5625%
$1 billion but less than $1.5 billion 0.50%
$1.5 billion and over 0.4375%
Such compensation shall be paid monthly in arrears on the last business day of
each month. The Fund's daily net assets shall be computed in accordance with the
Declaration of Trust of the Trust and any applicable votes and determinations of
the Trustees of the Trust. In case of initiation or termination of the Agreement
during any month with respect to the Fund, the fee for that month shall be based
on the number of calendar days during which it is in effect.
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 Fund
will pay all expenses other than those expressly stated to be payable by the
Adviser hereunder, which expenses payable by the Fund shall include, without
implied limitation, (i) expenses of organizing and maintaining the Fund and
continuing its existence, (ii) registration of the Trust under the Investment
Company Act of 1940, (iii) commissions, spreads, fees and other expenses
connected with the acquisition, holding and disposition of securities and other
investments, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, sale and redemption
of shares, (viii) expenses of registering and qualifying the Fund and its shares
under federal and state securities laws and of preparing and printing
registration statements or other offering statements or memoranda for such
purposes and for distributing the same to shareholders and investors, and fees
and expenses of registering and maintaining registrations of the Fund and of the
Fund's principal underwriter, if any, as 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 Fund (including without
limitation safekeeping of funds, securities and other investments, keeping of
books, accounts and records, and determination of net asset values), (xiv) fees,
expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Fund, (xv)
expenses for servicing shareholder accounts, (xvi) any direct charges to
shareholders approved by the Trustees of the Trust, (xvii) compensation and
expenses of Trustees of the Trust who are not members of the Adviser's
organization, (xviii) all payments to be made and expenses to be assumed by the
Fund pursuant to any one or more distribution plans adopted by the Trust on
behalf of the Fund pursuant to Rule 12b-1 under the Investment Company Act of
1940, and (xix) such non-recurring items as may arise, including expenses
incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees, officers and shareholders
with respect thereto.
4. Other Interests. It is understood that Trustees and officers of the
Trust and shareholders of the Fund are or may be or become interested in the
Adviser as trustees, officers, employees, shareholders or otherwise and that
trustees, officers, employees and shareholders of the Adviser are or may be or
become similarly interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise. It is also understood that
trustees, officers, employees and shareholders of the Adviser may be or become
interested (as directors, trustees, officers, employees, shareholders 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 "Xxxxx
Xxxxx" or any combination thereof as part of their name, 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 Fund 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 acquisition,
holding or disposition of any security or other investment.
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 or other
persons to execute the Fund'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, all as
permitted by the Investment Company Act of 1940.
7. Duration and Termination of this Agreement. This Agreement 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
April 30, 1999 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after April 30, 1999 is
specifically approved at least annually (i) by the Board of 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 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 Agreement without the payment of any
penalty, by action of Trustees of the Trust or the trustees of the Adviser, as
the case may be, and the Trust may, at any time upon such written notice to the
Adviser, terminate this Agreement by vote of a majority of the outstanding
voting securities of the Fund. This Agreement shall terminate automatically in
the event of its assignment.
8. Amendments of the Agreement. This Agreement may be amended by a
writing signed by both parties hereto, provided that no amendment to this
Agreement shall be effective 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 limiting the personal
liability of shareholders of the Fund, and the Adviser hereby agrees that it
shall have recourse to the Trust or the Fund for payment of claims or
obligations as between the Trust or the Fund and the Adviser arising out of this
Agreement and shall not seek satisfaction from the shareholders or any
shareholder of the Fund.
10. Use of the Name "Xxxxx Xxxxx". The Adviser hereby consents to the
use by the Fund of the name "Xxxxx Xxxxx" as part of the Fund's name; 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 Fund. The name
"Xxxxx Xxxxx" 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 "Xxxxx
Xxxxx". The Adviser shall have the right to require the Fund to cease using the
name "Xxxxx Xxxxx" as part of the Fund's name if the Fund ceases, for any
reason, to employ the Adviser or one of its affiliates as the Fund's investment
adviser. Future names adopted by the Fund for itself, 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.
11. 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" shall mean the vote, at a meeting of
shareholders, of the lesser of (a) 67 per centum or more of the shares of the
Fund present or represented by proxy at the meeting if the holders of more than
50 per centum of the shares of the Fund are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the shares of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
XXXXX XXXXX MUTUAL FUNDS TRUST
(on behalf of Xxxxx Xxxxx Tax-Managed
Emerging Growth Fund)
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Vice President
XXXXX XXXXX MANAGEMENT
By: /s/ Xxxx X. Xxxxxx
-------------------------
Xxxx X. Xxxxxx
Vice President
and not individually
