Exhibit (d): Investment Advisory Agreement between the Registrant and
----------- Xxxxxxx Capital Management, Inc.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, dated this 6th day of December 2000, between XXXXXXX CAPITAL
MANAGEMENT INVESTMENT TRUST (the "Trust"), a Delaware Business Trust, and
XXXXXXX CAPITAL MANAGEMENT, INC. (the "Adviser"), a Maryland corporation
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended (the "Advisers Act").
WHEREAS, the Trust is registered as an open-end management investment company of
the series type under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust desires to retain the Adviser to furnish investment advisory
and administrative services to the series of the Trust as described in the
schedules attached to this Agreement (each a "Fund" and, collectively, the
"Funds"), and the Adviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment.
-----------
(a) The Trust hereby appoints the Adviser to act as investment adviser to
each Fund for the period and on the terms set forth in this Agreement.
The Adviser accepts such appointment and agrees to furnish the
services set forth herein, on the terms and subject to the conditions
set forth herein and for the compensation provided in the attached
schedules.
(b) The Adviser may, in its discretion, provide such services through its
own employees or the employees of one or more affiliated companies
that are qualified to act as an investment adviser to the Trust under
applicable laws; provide that (i) all persons, when providing services
hereunder, are functioning as part of an organized group of persons,
and (ii) such organized group of persons is managed at all times by
authorized officers of the Adviser.
(c) The Adviser may from time to time employ or associate with such other
entities or persons as the Adviser believes appropriate to assist in
the performance of this Agreement with respect to a particular Fund or
Funds (each a "Sub-Adviser"), and that any such Sub-Adviser shall have
all of the rights and powers of the Adviser set forth in this
Agreement; provided that a Fund shall not pay any additional
compensation for any Sub-Adviser and the Adviser shall be as fully
responsible to the Trust for the acts and omissions of the Sub-Adviser
as it is for its own acts and omissions; and provided further that the
retention of any Sub-Adviser shall be approved in advance by (i) the
Board of Trustees of the Trust (the "Board") and (ii) the shareholders
of the relevant Fund if required under any applicable provisions of
the 1940 Act or any exemptive relief granted thereunder. The Adviser
will review, monitor and report to the Trust's Board regarding the
performance and investment procedures of any Sub-Adviser. In the event
that the services of any Sub-Adviser are terminated, the Adviser may
provide investment advisory services pursuant to this Agreement to the
Fund without a Sub-Adviser or employ another Sub-Adviser without
further shareholder approval, to the extent consistent with the 1940
Act or any exemptive relief granted thereunder. A Sub-Adviser may be
an affiliate of the Adviser.
2. Delivery of Documents. The Trust has furnished or will furnish the Adviser
with copies properly certified or authenticated of each of the following:
(a) The Trust's Trust Instrument (the "Instrument");
(b) The Trust's By-Laws (the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees (the "Board" and each
member thereof a "Trustee") and the resolution approved by a majority
of the outstanding shares of the Fund authorizing the appointment of
the Adviser and approving this Agreement;
(d) The Trust's Registration Statement on Form N-1A (the "Registration
Statement") under the 1940 Act and under the Securities Act of 1933 as
amended, relating to shares of beneficial interest of the Fund (the
"Shares") as filed with the Securities and Exchange Commission ("SEC")
and all amendments thereto;
(e) The current Prospectus and Statement of Additional Information of the
Funds (collectively, the "Prospectus").
The Trust will furnish the Adviser from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the foregoing
at the same time as such documents are required to be filed with the SEC.
3. Investment Advisory Services. Subject to the supervision of the Board, the
Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all
securities, investments, cash and cash equivalents in such Fund. The
Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund. The Adviser
will provide the services under this Agreement with respect to each Fund in
accordance with (i) that Fund's investment objectives, policies and
restrictions as stated in its Prospectus as in effect from time to time;
(ii) the Trust's Instrument, By-Laws and other governing instruments, as in
effect from time to time; and (iii) such other policies, procedures and/or
limitations as may be adopted by the Trust with respect to such Fund from
time to time and provided to the Adviser in writing.. The Adviser further
agrees that it:
(a) Will conform its activities to all applicable Rules and Regulations of
the SEC and will, in addition, conduct its activities under this
Agreement in accordance with regulations of any other Federal and
State agencies that may now or in the future have jurisdiction over
its activities under this Agreement;
(b) Will place orders pursuant to its investment determinations for the
Funds either directly with the issuer or with any broker or dealer. In
placing orders with brokers or dealers, the Adviser will attempt to
obtain the best net price and the most favorable execution of its
orders. Consistent with this obligation, when the Adviser believes two
or more brokers or dealers are comparable in price and execution, the
Adviser may prefer: (i) brokers and dealers who provide the Funds with
research advice and other services, or who recommend or sell Trust
shares and (ii) brokers who are affiliated with the Funds or the
Adviser; provided, however, that in no instance will portfolio
securities be purchased from or sold to the Adviser or any affiliated
person of the Adviser in principal transactions;
(c) Will provide certain executive personnel as may be mutually agreed
upon from time to time with the Board, the salaries and expenses of
such personnel to be borne by the Adviser unless otherwise mutually
agreed upon; and
(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities on
behalf of the Funds.
4. Services Not Exclusive. The advisory services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be free to
furnish similar services to others so long as its services under this
Agreement are not impaired thereby; provided, however, that without the
written consent of the Board, the Adviser will not serve as investment
adviser to any other investment company having a similar investment
objective to that of any Fund.
5. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records that it maintains
for the benefit of a Fund are the property of that Fund and further agrees
to surrender promptly to such Fund any of such records upon the Fund's
request. The Adviser further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act the records required to be maintained by
it pursuant to Rule 31a-1 under the 1940 Act that are not maintained by
others on behalf of the Fund.
6. Expenses. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its investment advisory services
pertaining to the Funds. The Adviser will pay, out of the Adviser's
resources, the entire cost of the promotion and sale of any Fund shares,
including the preparation of the Prospectus and other documents. The
Adviser will provide other information and services, other than services of
outside counsel or independent accountants or investment advisory services
to be provided by any Sub-Adviser to the Adviser for any Fund, required in
connection with the preparation of all registration statements and
prospectuses, prospectus supplements, statements of additional information,
all annual, semiannual, and periodic reports to shareholders of the Trust,
regulatory authorities, or others, and all notices and proxy solicitation
materials, furnished to shareholders of the Trust or regulatory
authorities, and all tax returns.
Notwithstanding the foregoing, the Funds shall pay the expenses and costs
of the following:
(a) Taxes, interest charges and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio transactions
of that Fund;
(c) Fees and expenses of the custodian of the Fund's portfolio securities;
(d) Fees and expenses of the Fund's administrator, transfer and dividend
disbursing agent and the Fund's fund accounting agent or, if the Fund
performs any such services without an agent, the costs of the same;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Fund's existence as a legal entity;
(g) Compensation of Trustees who are not interested persons of the Adviser
as law defines that term;
(h) Costs of Trust meetings;
(i) Federal and State registration or qualification fees and expenses;
(j) Costs of setting in type, printing and mailing prospectuses, reports
and notices to existing shareholders;
(k) The investment advisory fee payable to the Adviser, as provided in
paragraph 7 herein; and
(l) Distribution expenses, but only in accordance with a Plan of
Distribution adopted in accordance with Rule 12b-1 under the 1940 Act,
if any.
7. Compensation. The Trust will pay the Adviser and the Adviser will accept as
full compensation an investment advisory fee, based upon the daily average
net assets of each Fund, computed at the end of each month and payable
within five (5) business days thereafter, based upon the schedules attached
hereto.
8. Limitation of Liability; Indemnification; Failure to Perform; Force
Majeure.
(a) Neither the Adviser nor any of its directors, officers, shareholders,
agents, or employees shall be liable or responsible to the Trust, the
Funds or to any shareholder of the Funds for any error of judgment,
mistake of law or for any other loss whatsoever suffered by any Fund
in connection with error of judgment or mistake of law or for any act
or omission in the course of, or connected with, rendering services
hereunder or for any loss suffered by the Trust, a Fund or any
shareholder of a Fund in connection with the performance of this
Agreement, except a loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services or a loss
resulting from willful misfeasance, bad faith or gross negligence on
the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this
Agreement.
(b) Subject to the limitations set forth in this Subsection 8(b), a Fund
shall indemnify, defend and hold harmless (from the assets of the
Trust or Trusts to which the conduct in question relates) the Adviser
against all loss, damage and liability, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and expenses, including reasonable accountants' and
counsel fees, incurred by the Adviser in connection with the defense
or disposition of any action, suit or other proceeding, whether civil
or criminal, before any court or administrative or legislative body,
related to or resulting from this Agreement or the performance of
services hereunder, except with respect to any matter as to which it
has been determined that the loss, damage or liability is a direct
result of (i) a breach of fiduciary duty with respect to the receipt
of compensation for services or (ii) willful misfeasance, bad faith or
gross negligence on the part of the Adviser in the performance of its
duties or from reckless disregard by it of its duties under this
Agreement (either and both of the conduct described in clauses (i) and
(ii) above being referred to hereinafter as "Disabling Conduct"). A
determination that the Adviser is entitled to indemnification may be
made by (i) a final decision on the merits by a court or other body
before whom the proceeding was brought that the Adviser was not liable
by reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against the Adviser for insufficiency of
evidence of Disabling Conduct, or (iii) a reasonable determination,
based upon a review of the facts, that the Adviser was not liable by
reason of Disabling Conduct by, (a) vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Fund as the
quoted phrase is defined in Section 2(a)(19) of the 1940 Act nor
parties to the action, suit or other proceeding on the same or similar
grounds that is then or has been pending or threatened (such quorum of
such Trustees being referred to hereinafter as the "Independent
Trustees") or (b) an independent legal counsel in a written opinion.
Expenses, including accountants' and counsel fees so incurred by the
Adviser (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), may be paid from time to time by
the Fund or Trust to which the conduct in question related in advance
of the final disposition of any such action, suit or proceeding;
provided, that the Adviser shall have undertaken to repay the amounts
so paid if it is ultimately determined that indemnification of such
expenses is not authorized under this Subsection 8(b) and if (i) the
Adviser shall have provided security for such undertaking, (ii) the
Fund shall be insured against losses arising by reason of any lawful
advances, or (iii) a majority of the Independent Trustees, or an
independent legal counsel in a written opinion, shall have determined,
based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the Adviser
ultimately will be entitled to indemnification hereunder.
As to any matter disposed of by a compromise payment by the Adviser
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any
other expenses shall be provided with respect to a Fund unless such
indemnification shall be approved (i) by a majority of the Independent
Trustees or (ii) by an independent legal counsel in a written opinion.
Approval by the Independent Trustees pursuant to clause (i) shall not
prevent the recovery from the Adviser of any amount paid to the
Adviser in accordance with either of such clauses as indemnification
of the Adviser is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief
that the Adviser's action was in or not opposed to the best interest
of the Fund or to have been liable to the Fund or its shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in its conduct under the Agreement.
The right of indemnification provided by this Subsection 8(b) shall
not be exclusive of or affect any of the rights to which the Adviser
may be entitled. Nothing contained in this Subsection 8(b) shall
affect any rights to indemnification to which Trustees, officers or
other personnel of any Fund, and other persons may be entitled by
contract or otherwise under law, nor the power of any Fund to purchase
and maintain liability insurance on behalf of any such person.
The Board shall take all such action as may be necessary and
appropriate to authorize a Fund hereunder to pay the indemnification
required by this Subsection 8(b) including, without limitation, to the
extent needed, to determine whether the Adviser is entitled to
indemnification hereunder and the reasonable amount of any indemnity
due it hereunder, or employ independent legal counsel for that
purpose.
(c) The Adviser acknowledges that the terms "Funds" and "Trustees" as used
herein, refer, respectively, to the trust created by the Instrument
and the Trustees thereof, as trustees but not individually or
personally, acting from time to time under the Instrument, to which
reference is hereby made and a copy of which is on file at the office
of the Secretary of State of the State of Delaware, such reference
being inclusive of any and all amendments thereto so filed or
hereafter filed. The obligations of the "Funds" entered into in the
name or on behalf thereof by any of the Trustees, representatives or
agents are made not individually, but in such capacities and are not
binding upon any of the Trustees, shareholders or representatives of
the Trust personally, but bind only the assets of the Trust, and all
persons dealing with the Trust or a Fund must look solely to the
assets of the Trust or Fund for the enforcement of any claims against
the Trust or Fund.
(d) The Adviser agrees to indemnify and hold harmless the Trust and
Trust's Trustees and officers from all loss, damage and liability,
including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses,
including reasonable accountants' and counsel fees, incurred by the
Trust in connection with the defense or disposition of any body,
related to or resulting from (i) any breach or violation of this
Agreement by the Adviser; (ii) any breach of fiduciary duty with
respect to the receipt of compensation for services; and (iii) any
willful misfeasance, bad faith or gross negligence on the part of the
Adviser in the performance of its duties or from reckless disregard by
it of its duties under this Agreement.
(e) No failure or omission by either party hereto in the performance of
any obligation of this Agreement (other than payment obligations)
shall be deemed a breach of this Agreement or create any liability if
the same shall arise from any cause or causes beyond the control of
the party, including but not limited to, the following: acts of God,
acts or omissions of any governmental agency; any rules, regulations,
or orders issued by any governmental authority or by any officer,
department, agency or instrumentality thereof; fire; storm; flood;
earthquake, war; rebellion; insurrection; riot; and invasion and
provided that such failure or omission resulting from one of the above
causes is cured as soon as is practicable after the occurrence of one
or more of the above-mentioned causes.
(f) The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and
protect the Adviser and the Trust and their respective directors,
officers, employees and agents and shall inure to the benefit of
its/their respective successors, assigns and personal representatives.
9. Duration and Termination. With respect to each Fund, this Agreement shall
become effective upon the commencement of operations of each Fund as set
forth in the attached schedules and, unless sooner terminated as provided
herein, shall continue in effect for two years from such commencement of
operations. Thereafter, this Agreement shall be renewable for successive
periods of one year each, provided such continuance is specifically
approved annually:
(a) By the vote of a majority of those members of the Board who are not
parties to this Agreement or interested persons of any such party (as
that term is defined in the 1940 Act), cast in person at a meeting
called for the purpose of voting on such approval; and
(b) By vote of either the Board or, with respect to any Fund, a majority
(as that term is defined in the 0000 Xxx) of the outstanding voting
securities of that Fund.
Notwithstanding the foregoing, this Agreement may be terminated by a Fund or by
the Adviser at any time on sixty (60) days' written notice, without the payment
of any penalty, provided that termination by the Fund must be authorized either
by vote of Trustees or by vote of a majority of the outstanding voting
securities of the Fund. This Agreement will automatically terminate in the event
of its assignment (as that term is defined in the 1940 Act).
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, except by a written
instrument signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No material
amendment of this Agreement shall be effective with respect to a Fund
until approved by vote of the holders of a majority of the Fund's
outstanding voting securities (as defined in the 1940 Act). The
modification of any of the non-material terms of this Agreement may be
approved by a vote of a majority of those Trustees of the Trust who
are not interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby. This Agreement shall be
binding and shall inure to the benefit of the parties hereto and their
respective successors.
12. Applicable Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of Delaware.
13. Representations and Warranties.
(a) The Adviser hereby represents and warrants to the Trust as
follows: (i) The Adviser is a corporation duly organized and in
good standing under the laws of the State of Maryland and is
fully authorized to enter into this Agreement and carry out its
duties and obligations hereunder. (ii) The Adviser is registered
as an investment adviser with the SEC under the Advisers Act and
is registered or licensed as an investment adviser under the laws
of all applicable jurisdictions. The Adviser shall maintain such
registrations or licenses in effect at all times during the term
of this Agreement. (iii) The Adviser at all times shall provide
its best judgment and effort to the Trust in carrying out the
Adviser's obligations hereunder.
(b) The Trust hereby represents and warrants to the Adviser as
follows: (i) The Trust has been duly organized as a business
trust under the laws of the State of Delaware and is authorized
to enter into this Agreement and carry out its terms. (ii) The
Trust is registered as an investment company with the Commission
under the 1940 Act and shares of each Fund are registered for
offer and sale to the public under the 1933 Act and all
applicable state securities laws where currently sold. Such
registrations will be kept in effect during the term of this
Agreement.
14. Interested Persons. It is understood that, to the extent consistent
with applicable laws, the Trustees, officers and shareholders of the
Trust are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and shareholders of
the Adviser are or may be or become similarly interested in the Trust.
15. Independent Contractor. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board from time to
time, have no authority to act for or represent a Fund in any way or
otherwise be deemed an agent of a Fund.
16. Structure of Agreement. The Trust is entering into this Agreement on
behalf of the respective Funds severally and not jointly. The
responsibilities and benefits set forth in this Agreement shall refer
to each Fund severally and not jointly. No Fund shall have any
responsibility for any obligation of any other Fund arising out of
this Agreement. Without otherwise limiting the generality of the
foregoing: (a) any breach of any term of this Agreement regarding the
Trust with respect to any one Fund shall not create a right or
obligation with respect to any other Fund; (b) under no circumstances
shall the Adviser have the right to set off claims relating to a Fund
by applying property of any other Fund; and (c) the business and
contractual relationships created by this Agreement, consideration for
entering into this Agreement, and the consequences of such
relationship and consideration relate solely to the Trust and the
particular Fund to which such relationship and consideration applies.
This Agreement is intended to govern only the relationships between
the Adviser, on the one hand, and the Trust and the Funds, on the
other hand, and (except as specifically provided above in this
Paragraph 16) is not intended to and shall not govern (i) the
relationship between the Trust and any Fund or (ii) the relationships
among the respective Funds.
17. 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 and, to this extent,
the provisions of this Agreement shall be deemed to be severable.
18. Notices. Notices of any kind to be given to the Trust hereunder by the
Adviser shall be in writing and shall be duly given if mailed or
delivered to the Xxxxxxx Capital Management Investment Trust, 000
Xxxxx Xxxxxxxxxx Xxxxxx, Xxxx Xxxxxx Xxx 00, Xxxxx Xxxxx, XX 00000,
Attention: C. Xxxxx Xxxxxx, III or to such other address or to such
individual as shall be so specified by the Trust to the Adviser.
Notices of any kind to be given to the Adviser hereunder by the Trust
shall be in writing and shall be duly given if mailed or delivered to
the Adviser at 000 Xxxxx Xxxxxx, Xxxxxxxx Xxxxxxxx Xxxxxxxx,
Xxxxxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxx, or at such other
address or to such individual as shall be so specified by the Adviser
to the Trust. Notices shall be effective upon delivery.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: XXXXXXX CAPITAL MANAGEMENT INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxx, Xx.
_____________________________ ____________________________
Title: Treasurer Title: Trustee
_________________________ _________________________
ATTEST: XXXXXXX CAPITALMANAGEMENT, INC.
By: By: /s/ Xxxx X. Xxxxxxx
_____________________________ ____________________________
Title: Title: President
_________________________ _________________________
SCHEDULE A
INVESTMENT ADVISER'S COMPENSATION SCHEDULE
For the services delineated in the INVESTMENT ADVISORY AGREEMENT and rendered to
THE XXXXXXX AGGRESSIVE EQUITY FUND, the Adviser shall be compensated monthly, as
of the last day of each month, within five (5) business days of the month end, a
fee based upon the daily average net assets of the Fund according to the
following schedule:
Net Assets Annual Fee
-------------------- ----------
On all assets 1.00%
THE XXXXXXX AGGRESSIVE EQUITY FUND commenced operations on December __, 2000.
SCHEDULE B
INVESTMENT ADVISER'S COMPENSATION SCHEDULE
For the services delineated in the INVESTMENT ADVISORY AGREEMENT and rendered to
THE XXXXXXX TOTAL RETURN FUND, the Adviser shall be compensated monthly, as of
the last day of each month, within five (5) business days of the month end, a
fee based upon the daily average net assets of the Fund according to the
following schedule:
Net Assets Annual Fee
-------------------- ----------
On all assets 1.00%
THE XXXXXXX TOTAL RETURN FUND commenced operations on December __, 2000.
