EXHIBIT (d)(1)(ii)
AMENDMENT NUMBER ONE
TO THE
INVESTMENT ADVISORY AGREEMENT
This Amendment Number One, dated November 1, 2004, to the Investment Advisory
Agreement dated May 31, 1997 (the "Agreement") by and between Xxx Xxxxxx Life
Investment Trust (the "Trust"), a Delaware statutory trust, and Xxx Xxxxxx Asset
Management (the "Adviser," successor in interest of Xxx Xxxxxx Asset Management,
Inc.), a Delaware statutory trust, hereby amends the terms and conditions of the
Agreement in the manner specified herein.
W I T N E S S E T H
WHEREAS, the Board of Trustees of the Fund at a meeting held on September 23,
2004 has approved a change in the compensation payable to the Adviser on behalf
of the Money Market Portfolio; and
WHEREAS, the parties desire to amend and restate Section 4 of the Agreement
relating to the investment advisory fee.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter contained, the parties hereby agree to amend the
Agreement, as follows:
Section 4 of the Agreement is hereby deleted in its entirety and replaced with
the following:
(4) Compensation Payable to the Adviser
The Trust shall pay to the Adviser, as compensation for the services rendered,
facilities furnished and expenses paid by the Adviser, a monthly fee computed at
the following annual rate:
..50% on the first $500 million of the Portfolios' average daily net assets;
..45% on the next $500 million of the Portfolios' average daily net assets; and
..40% of any excess over $1 billion.
For purposes of this calculation, assets of such Portfolios shall be combined
in calculating the investment advisory fee. Each Portfolio shall bear its pro
rata share of such fee based upon its average daily net assets, and the amount
allocated to the Money Market Portfolio is hereby defined as the "Money Market
Pro Rata Amount".
Notwithstanding the forgoing, the amount to be paid by the Money Market
Portfolio shall be the lesser of: (1) the Money Market Pro Rata Amount as
calculated above or (2) the amount calculated under the following schedule
applied to only the average daily net assets of the Money Market Portfolio (the
"Money Market Only Amount"):
AVERAGE DAILY FEE AS A PERCENT PER ANNUM
NET ASSETS OF AVERAGE DAILY NET ASSETS
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First $250 million 0.450%
Next $500 million 0.375%
Next $500 million 0.325%
Next $250 million 0.300%
Next $250 million 0.275%
Next $500 million 0.250%
Next $500 million 0.225%
Next $12.25 billion 0.200%
Next $ 2.5 billion 0.199%
Next $ 7.5 billion 0.198%
Next $ 5 billion 0.197%
Over $30 billion 0.196%
The Adviser agrees to forgo any difference between the Money Market Pro Rata
Amount and the Money Market Only Amount. The advisory fee amounts payable by the
other Portfolios (excluding the Money Market Portfolio) are not impacted by the
Money Market Only Amount and/or any amounts the Adviser foregoes by applying the
Money Market Only Amount.
Average daily net assets shall be determined by taking the average of the net
assets for each business day (for each calendar day, in the case of the Money
Market Portfolio) during a given calendar month calculated in the manner
provided in the Trust's Declaration of Trust. Such fee shall be payable for each
calendar month as soon as practicable after the end of that month.
The fees payable to the Adviser by the Trust pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage or
similar payments received by the Adviser, or any other direct or indirect
majority owned subsidiary of Xxx Xxxxxx Investments Inc., in connection with the
purchase and sale of portfolio investments of the Trust, less any direct
expenses incurred by such person, in connection with obtaining such commissions,
fees, brokerage or similar payments. The Adviser shall use its best efforts to
recapture all available tender offer solicitation fees and exchange offer fees
in connection with the Trust's portfolio transactions and shall advise the
Trustees of any other commissions, fees, brokerage or similar payments which may
be possible for the Adviser or any other direct or indirect majority owned
subsidiary of Xxx Xxxxxx Investments Inc. to receive in connection with Trust's
portfolio transactions or other arrangements which may benefit the Trust.
In the event that the ordinary business expenses of the Trust for any fiscal
year should exceed .95% of average daily net assets, the compensation due the
Adviser for such fiscal year shall be reduced by the amount of such excess. The
Adviser's compensation shall be so reduced by a reduction or a refund thereof,
at the time such compensation is payable after the end of each calendar month
during such fiscal year of the Trust, and if such amount should exceed such
monthly compensation, the Adviser shall pay the Trust an amount sufficient to
make up the deficiency, subject to readjustment during the Trust's
fiscal year. For purposes of this paragraph, all ordinary business expenses of
the Trust shall include the investment advisory fee and other operating expenses
paid by the Trust except (i) for interest and taxes; (ii) brokerage commissions;
(iii) as a result of litigation in connection with a suit involving a claim for
recovery by the Trust; (iv) as a result of litigation involving a defense
against a liability asserted against the Trust, provided that, if the Adviser
made the decision or took the actions which resulted in such claim, it acted in
good faith without negligence or misconduct; and (v) any indemnification paid by
the Trust to its officers and trustees and the Adviser in accordance with
applicable state and federal laws as a result of such litigation.
If the Adviser shall serve for less than the whole of any month, the foregoing
compensation shall be prorated.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written.
XXX XXXXXX LIFE INVESTMENT TRUST XXX XXXXXX ASSET MANAGEMENT
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxx, III
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Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxx, III
Executive Vice President Managing Director
and Principal Executive Officer
