INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT, made this 2nd day of
August, 1993, by and between Xxxx Xxxxx Investors Trust, Inc., a Maryland
corporation (the "Corporation"), and Xxxx Xxxxx Fund Adviser, Inc., a Maryland
corporation (the "Adviser").
WHEREAS, the Corporation is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended ("1940
Act") and intends to offer for public sale under the Securities Act of 1933 and
various state securities laws, distinct series of shares of common stock
("Series"), each Series corresponding to a distinct portfolio; and
WHEREAS, the Corporation wishes to retain the Adviser to provide
investment advisory, management, and administrative services to the Corporation
and each Series as now exists and as hereafter may be established; and
WHEREAS, the Adviser is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. The Corporation hereby appoints Xxxx Xxxxx Fund Adviser, Inc. as
Adviser of each Series for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. Each Series shall at all times keep the Adviser fully informed with
regard to the securities owned by it, its funds available, or to become
available, for investment, and generally as to the condition of its affairs. It
shall furnish the Adviser with such other documents and information with regard
to its affairs as the Adviser may from time to time reasonably request.
3. (a) Subject to the supervision of the Corporation's Board of
Directors, the Adviser shall regularly provide each Series with investment
research, advice, management and supervision and shall furnish a continuous
investment program for each Series' portfolio of securities consistent with each
Series' investment goals and policies. The Adviser shall determine from time to
time what securities will be purchased, retained or sold by each Series, and
shall implement those decisions, all subject to the provisions of the
Corporation's Articles of Incorporation and By-laws, the 1940 Act, the
applicable rules and regulations of the Securities and Exchange Commission, and
other applicable federal and state law, as well as the investment goals and
policies of each Series. The Adviser will place orders pursuant to its
investment determinations for each Series either directly with the issuer or
with any broker or dealer. In placing orders with brokers and dealers the
Adviser will attempt to obtain the best net price and the most favorable
execution of its orders; however, the Adviser may, in its discretion, purchase
and sell portfolio securities through brokers who provide each Series with
research, analysis, advice and similar services, and the Adviser may pay to
these brokers, in return for research and analysis, a higher commission or
spread than may be charged by other brokers. The Adviser is authorized to
combine orders on behalf of each Series with orders on behalf of other clients
of the Adviser, consistent with guidelines adopted by the Board of Directors of
the Corporation. The Adviser shall also provide advice and recommendations with
respect to other aspects of the business and affairs of each Series, and shall
perform such other functions of management and supervision as may be directed by
the Board of Directors of the Corporation.
(b) The Corporation hereby authorizes any entity or person associated
with the Adviser which is a member of a national securities exchange to effect
any transaction on the exchange for the account of each Series which is
permitted by Section 11(a) of the Securities Exchange Act of 1934 and Rule
11a2-2(T)
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thereunder, and the Corporation hereby consents to the retention by such
person associated with the Adviser of compensation for such transactions in
accordance with Rule 11a2-2(T)(a)(2)(iv).
4. The Adviser may enter into a contract ("Advisory Agreement") with an
investment adviser in which the Adviser delegates to such investment adviser any
or all its duties specified in Paragraph 3 hereunder, provided that such
Advisory Agreement imposes on the investment adviser bound thereby all duties
and conditions to which the Adviser is subject hereunder, and further provided
that such Advisory Agreement meets all requirements of the 1940 Act and rules
thereunder.
5. (a) The Adviser, at its expense, shall supply the Board of Directors
and officers of the Corporation with all statistical information and reports
reasonably required by them and reasonably available to the Adviser and shall
furnish each Series with office facilities, including space, furniture and
equipment and all personnel reasonably necessary for the operation of the
Corporation and each Series. The Adviser shall oversee the maintenance of all
books and records with respect to the Corporation's and each Series' securities
transactions and the keeping of the Corporation's and each Series' books of
account in accordance with all applicable federal and state laws and
regulations. In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Adviser hereby agrees that any records which it maintains for the
Corporation or any Series are the property of the Corporation, and further
agrees to surrender promptly to the Corporation any of such records upon the
Corporation's request. The Adviser further agrees to arrange for the
preservation of the records required to be maintained by Rule 31a-1 under the
1940 Act for the periods prescribed by Rule 31a-2 under the 1940 Act. The
Adviser shall authorize and permit any of its directors, officers and employees,
who may be elected as directors or officers of the Corporation, to serve in the
capacities in which they are elected.
(b) Other than as herein specifically indicated, the Adviser shall not
be responsible for the expenses of the Corporation or any Series. Specifically,
the Adviser will not be responsible, except to the extent of the reasonable
compensation of employees of the Corporation and each Series whose services may
be used by the Adviser hereunder, for any of the following expenses of the
Corporation and each Series, which expenses shall be borne by the Corporation
and each Series: advisory fees; distribution fees; interest, taxes, governmental
fees, fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; the cost (including brokerage
commissions or charges, if any) of securities purchased or sold by each Series
and any losses in connection therewith; fees of custodians, transfer agents,
registrars or other agents; legal expenses; expenses of preparing share
certificates; expenses relating to the redemption or repurchase of each Series'
shares; expenses of registering and qualifying shares of each Series for sale
under applicable federal and state law; expenses of preparing, setting in print,
printing and distributing prospectuses, reports, notices and dividends to Fund
shareholders; costs of stationery; costs of stockholders' and other meetings of
the Corporation and each Series; directors' fees; audit fees; travel expenses of
officers, directors and employees of the Corporation if any; and the
Corporation's pro rata portion of premiums on any fidelity bond and other
insurance covering the Corporation and its officers and directors.
6. No director, officer or employee of the Corporation or Fund shall
receive from the Corporation any salary or other compensation as such director,
officer or employee while he or she is at the same time a director, officer, or
employee of the Adviser or any affiliated company of the Adviser. This paragraph
shall not apply to directors, executive committee members, consultants and other
persons who are not regular members of the Adviser's or any affiliated company's
staff.
7. As compensation for the services performed and the facilities
furnished and expenses assumed by the Adviser, including the services of any
consultants or sub-advisers retained by the Adviser, Xxxx Xxxxx American Leading
Companies Trust, the only currently established Series of the Corporation, shall
pay the Adviser, as promptly as possible after the last day of each month, a
fee, computed daily at an annual rate of 0.75% of the Series' average daily net
assets. The first payment of the fee shall be made as
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promptly as possible at the end of the month succeeding the effective date of
this Agreement. If this Agreement is terminated as to any or all Series as of
any date not the last day of a month, such fee shall be paid as promptly as
possible after such date of termination, shall be based on the average daily net
assets of such Series in that period from the beginning of such month to such
date of termination, and shall be based on that proportion of such average daily
net assets as the number of business days in such period bears to the number of
business days in such month. The average daily net assets of each Series shall
in all cases be based only on business days and be computed as of the time of
the regular close of business of the New York Stock Exchange, or such other time
as may be determined by the Board of Directors of the Corporation. Each such
payment shall be accompanied by a report prepared either by the Corporation and
each Series or by a reputable firm of independent accountants, which shall show
the amount properly payable to the Adviser under this Agreement and the detailed
computation thereof.
8. The Adviser assumes no responsibility under this Agreement other
than to render the services called for hereunder, in good faith, and shall not
be responsible for any action of the Board of Directors of the Corporation in
following or declining to follow any advice or recommendations of the Adviser;
provided, that nothing in this Agreement shall protect the Adviser against any
liability to the Corporation or its shareholders to which it would otherwise be
subject by reason of 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 hereunder.
9. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Adviser who may also be a director,
officer, or employee of the Corporation or each Series, to engage in any other
business or to devote his time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a dissimilar
nature, or limit or restrict the right of the Adviser to engage in any other
business or to render services of any kind, including investment advisory and
management services, to any other corporation, firm, individual or association.
10. As used in this Agreement, the terms "assignment", "interested
persons", and "majority of the outstanding voting securities" shall have the
meanings given to them by Section 2(a) of the 1940 Act, subject to such
exemptions and interpretations as may be granted by the Securities and Exchange
Commission by any rule, regulation or order.
11. This Agreement will become effective with respect to each Series on
the date first written above, provided that it shall have been approved by the
Corporation's Board of Directors and by the shareholders of that Series in
accordance with the requirements of the 1940 Act and, unless sooner terminated
as provided herein, will continue in effect for two years from the above written
date. Thereafter, if not terminated, this Agreement shall continue in effect
with respect to each Series for successive annual periods ending on the same
date of each year, provided that such continuance is specifically approved at
least annually (i) by the Corporation's Board of Directors or (ii) by a vote of
a majority of the outstanding voting securities of the Series (as defined in the
1940 Act), provided that in either event the continuance is also approved by a
majority of the Corporation's Directors who are not interested persons (as
defined in the 0000 Xxx) of any party to this Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval.
12. This Agreement is terminable with respect to any Series without
penalty by the Corporation's Board of Directors, by vote of a majority of the
outstanding voting securities of each affected Series (as defined in the 1940
Act), or by the Adviser, on not less than 60 days' notice to the other party and
will be terminated upon the mutual written consent of the Adviser and the
Corporation. This Agreement shall terminate automatically in the event of its
assignment by the Adviser and shall not be assignable by the Corporation without
the consent of the Adviser.
13. In the event this Agreement is terminated by either party or upon
written notice from the Adviser at any time, the Corporation hereby agrees that
it will eliminate from its corporate name any reference
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to the name of "Xxxx Xxxxx." The Corporation shall have the non-exclusive use of
the name "Xxxx Xxxxx" in whole or in part only so long as this Agreement is
effective or until such notice is given.
14. The Adviser agrees that for services rendered to a Series, or
indemnity due in connection with service to a Series, it shall look only to
assets of that Series for satisfaction and that it shall have no claim against
the assets of any other Series.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: XXXX XXXXX INVESTORS TRUST, INC.
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx, Xx.
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Attest: XXXX XXXXX FUND ADVISER, INC.
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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