ADVISORY AGREEMENT
ADVISORY AGREEMENT, dated October __, 1996, between FFTW Funds, Inc., a
Maryland corporation (the "Fund") and Xxxxxxx Xxxxxxx Trees & Xxxxx, Inc., a New
York corporation (the "Adviser").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. Attorney-in-Fact. The Fund appoints the Adviser as its attorney-in-
fact to invest and reinvest the assets of the Inflation Indexed Portfolio (the
"Portfolio"), as fully as the Fund itself could do. The Adviser hereby accepts
this appointment.
2. Duties of the Adviser. (a) The Adviser shall be responsible for
managing the investment portfolio of the Portfolio, including, without
limitation, providing investment research, advice and supervision, determining
which portfolio securities shall be purchased or sold by the Portfolio,
purchasing and selling securities on behalf of the Portfolio and determining how
voting and other rights with respect to portfolio securities of the Portfolio
shall be exercised, subject in each case to the control of the Board of
Directors of the Fund (the "Board") and in accordance with the objective,
policies and principles of the Portfolio set forth in the Registration
Statement, as amended, of the Fund, the requirements of the Investment Company
Act of 1940, as amended, (the "Act") and other applicable law. In performing
such duties, the Adviser shall provide such office space, and such executive and
other personnel as shall be necessary for the investment operations of the
Portfolio. In managing the Portfolio in accordance with the requirements set
forth in this paragraph 2, the Adviser shall be entitled to act upon advice of
counsel to the Fund or counsel to the Adviser.
(b) Subject to Section 36 of the Act, the Adviser shall not be liable to
the Fund for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the management of the Portfolio
and the performance of its duties under this Agreement except for losses arising
out of the Adviser's willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement. It is agreed that the Adviser
shall have no responsibility or liability for the accuracy or completeness of
the Fund's Registration Statement under the Act and the Securities Act of 1933
except for information about the Adviser contained in the Prospectus included as
part of such Registration Statement supplied by the Adviser for inclusion
therein. The Fund agrees to indemnify and hold the Adviser harmless from and
against all claims, losses, costs, damages and expenses, including reasonable
fees and expenses for counsel, incurred by it resulting from any claim, demand,
action or suit in connection with or arising out of any action or omission by
the Adviser in the performance of this Agreement except for those claims,
losses, costs, damages and expenses resulting from the Adviser's willful
misfeasance, bad faith, or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement.
(c) The Adviser and its officers may act and continue to act as
investment advisers and managers for others (including, without limitation,
other investment companies), and nothing in this Agreement will in any way be
deemed to restrict the right of the Adviser to perform investment management or
other services for any other person or entity, and the performance of such
services for others will not be deemed to violate or give rise to any duty or
obligation to the Fund.
(d) Except as provided in Section 5, nothing in this Agreement will limit
or restrict the Adviser or any of its officers, affiliates or employees from
buying, selling or trading in any securities for its or their own account or
accounts. The Fund acknowledges that the Adviser and its officers, affiliates
or employees, and its other clients may at any time have, acquire, increase,
decrease or dispose of positions in investments which are at the same time being
acquired or disposed of for the account of the Portfolio. The Adviser will have
no obligation to acquire for the Portfolio a position in any investment which
the Adviser, its officers, affiliates or employees may acquire for its or their
own accounts or for the account of another client, if in the sole discretion of
the Adviser, it is not feasible or desirable to acquire a position in such
investment for the account of the Portfolio, provided that the Adviser shall
have acted in good faith and in a manner deemed equitable to the Portfolio.
(e) If the purchase or sale of securities consistent with the investment
policies of the Portfolio and one or more other clients serviced by the Adviser
is considered at or about the same time, transactions in such securities will be
allocated among the Portfolio and clients in a manner deemed fair and reasonable
by the Adviser. Although there is no specified formula for allocating such
transactions, the various allocation methods used by the Adviser, and the
results of such allocations, are subject to periodic review by the Board.
3. Expenses. The Adviser shall pay all of its expenses arising from
the performance of its obligations under this Agreement. Except as provided
below, the Adviser shall not be required to pay any other expenses of the Fund
(including out-of-pocket expenses, but not including the Adviser's overhead or
employee costs), including without limitation, organization expenses of the
Fund; brokerage commissions; maintenance of books and records which are required
to be maintained by the Fund's custodian or other agents of the Fund; telephone,
telex, facsimile, postage and other communications expenses; expenses relating
to investor and public relations; freight, insurance and other charges in
connection with the shipment of the Fund's portfolio securities; indemnification
of Directors and officers of the Fund; travel expenses (or an appropriate
portion thereof) of Directors and officers of the Fund to the extent that such
expenses relate to attendance at meetings of the Board of Directors of the Fund
or any committee thereof or advisors thereto held outside of New York; interest,
fees and expenses of independent attorneys, auditors, custodians, accounting
agents, transfer agents, dividend disbursing agents and registrars; payment for
portfolio pricing or valuation service to pricing agents, accountants, bankers
and other specialists, if any; taxes and government fees; cost of stock
certificates and any other expenses (including clerical expenses) of issue,
sale, repurchase or redemption of shares; expenses of registering and qualifying
shares of the Fund under Federal and state laws and regulations; expenses of
printing and distributing reports, notices, dividends and proxy materials to
existing stockholders; expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of printing and
distributing prospectuses; expenses of annual and special stockholders'
meetings; costs of stationery, fees and expenses (specifically including travel
expenses relating to Fund business) of Directors of the Fund who are not
employees of the Adviser or its affiliates; membership dues in the Investment
Company Institute; insurance premiums and extraordinary expenses such as
litigation expenses.
4. Compensation. (a) As compensation for the services performed and
the facilities and personnel provided by the Adviser pursuant to this Agreement,
the Fund will pay to the Adviser promptly at the end of each calendar month, a
fee, calculated on each day during such month, at an annual rate of 0.40% of the
Portfolio's average daily net assets. The Adviser shall be entitled to receive
during any month such interim payments of its fee hereunder as the Adviser shall
request, provided that no such payment shall exceed 50% of the amount of such
fee then accrued on the books of the Portfolio and unpaid.
(b) If the Adviser shall serve hereunder for less than the whole of any
month, the fee payable hereunder shall be prorated.
(c) For purposes of this Section 4, the "average daily net assets" of the
Portfolio shall mean the average of the values placed on the Portfolio's net
assets on each day pursuant to the applicable provisions of the Fund's
Registration Statement, as amended.
5. Purchase and Sale of Securities. The Adviser shall purchase
securities from or through and sell securities to or through such persons,
brokers or dealers as the Adviser shall deem appropriate in order to carry out
the policy with respect to the allocation of portfolio transactions as set forth
in the Registration Statement of the Fund, as amended, or as the Board may
direct from time to time. The Adviser will use its reasonable efforts to
execute all purchases and sales with dealers and banks on a best net price
basis. The Adviser will consider the full range and quality of services offered
by the executing broker or dealer when making these determinations. Neither the
Adviser nor any of its officers, affiliates or employees will act as principal
or receive any compensation from the Portfolio in connection with the purchase
or sale of investments for the Portfolio other than the fee referred to in
Paragraph 4 hereof.
6. Term of Agreement. This Agreement shall continue in full force and
effect until two years from the date hereof, and will continue in effect from
year to year thereafter if such continuance is approved in the manner required
by the Act, provided that this Agreement is not otherwise terminated. The
Adviser may terminate this Agreement at any time, without the payment of any
penalty, upon 60 days' written notice to the Fund. The Fund may terminate this
Agreement with respect to the Portfolio at any time, without the payment of any
penalty, on 60 days' written notice to the Adviser by vote of either the
majority of the non-interested members of the Board or a majority of the
outstanding voting securities (as defined in Section 2(a)(42) of the Act) of the
Portfolio. This Agreement will automatically terminate in the event of its
assignment (the term "assignment" for this purpose having the meaning defined
in Section 2(a)(4) of the Act).
7. Notices. Any notice or other communication authorized or required
hereunder shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice to the Fund shall be addressed to AMT Capital
Services, Inc. at 000 Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxxxxxxx. Notice to the Adviser shall be addressed to
Xxxxxxx Xxxxxxx Trees & Xxxxx, Inc. at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxx X. Xxxxxx. Either party may designate a different
address by notice to the other party. Any such notice or other communication
shall be deemed given when actually received.
8. Amendment. This Agreement may be amended by the parties hereto
with respect to the Portfolio only if such amendment is specifically approved
(i) by the Board of Directors of the Fund or by the vote of a majority of
outstanding shares of the Portfolio ("Shares"), and (ii) by the Director(s)
who are not interested persons (the term "non interested" for this purpose
having the meaning defined in section 2 (a) (19) of the Act) of the Fund
("Non-Interested Director(s)"), which vote must be ast in person at a meeting
called for the purpose of voting on such approval.
9. Right of Adviser In Corporate Name. The Adviser and the Fund each
agree that the phrase "FFTW," which comprises a component of the Portfolio's
corporate name, is a property right of the Adviser. The Fund agrees and
consents that (i) it will only use the phrase "FFTW" as a component of its
corporate name and for no other purpose; (ii) it will not purport to grant to
any third party the right to use the phrase "FFTW" for any purpose; (iii) the
Adviser or any corporate affiliate of the Adviser may use or grant to others the
right to use the phrase "FFTW" or any combination or abbreviation thereof, as
all or a portion of a corporate or business name or for any commercial purpose,
including a grant of such right to any other investment company, and at the
request of the Adviser, the Fund will take such action as may be required to
provide its consent to such use or grant; and (iv) upon the termination of any
investment advisory agreement into which the Adviser and the Fund may enter, the
Fund shall, upon request by the Adviser, promptly take such action, at its own
expense, as may be necessary to change the Portfolio's corporate name to one not
containing the phrase "FFTW" and following such a change, shall not use the
phrase "FFTW" or any combination thereof, as part of the Portfolio's corporate
name or for any other commercial purpose, and shall use its reasonable efforts
to cause its officers, directors and stockholders to take any and all actions
which the Adviser may request to effect the foregoing and recovery to the
Adviser any and all rights to such phrase.
10. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require or to
impose any duty upon either of the parties to do anything in violation of any
applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed by their duly authorized officers as of the date first written
above.
ATTEST FFTW FUNDS, INC.
By:_______________________ By:_______________________
Xxxx X. Xxxxx Xxxxx Xxxx Olcay
President
ATTEST XXXXXXX XXXXXXX TREES & XXXXX, INC.
By:_______________________ By:_______________________
Xxxxxxx X. Xxxx Xxxxxxx X. Xxxxxx
Secretary and Treasurer
