EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 15th day of December, 1981, between
FIDUCIARY CAPITAL GROWTH FUND, INC., a Wisconsin corporation (the "Fund"),
and FIDUCIARY MANAGEMENT, INC., a Wisconsin corporation (the "Adviser"):
W I T N E S S E T H :
WHEREAS, the Fund is in the process of registering with the
Securities and Exchange Commission as an open-end management investment
company under the Investment Company Act of 1940 (the "Act");
WHEREAS, upon so registering with the Securities and Exchange
Commission, the Fund will be a registered investment company satisfying
the conditions of Section 10(d) of the Act; and
WHEREAS, the Fund desires to retain the Adviser, which is an
investment adviser registered under the Investment Advisers Act of 1940
and which is engaged principally in the business of rendering investment
supervisory services within the meaning of Section 202(a)(13) of the
Investment Advisers Act of 1940, as its investment adviser.
NOW, THEREFORE, the Fund and the Adviser do mutually promise and
agree as follows:
1. Employment. The Fund hereby employs the Adviser to manage
the investment and reinvestment of the assets of the Fund for the period
and on the terms set forth in this Agreement. The Adviser hereby accepts
such employment for the compensation herein provided and agrees during
such period to render the services and to assume the obligations herein
set forth.
2. Authority of the Adviser. The Adviser shall supervise and
manage the investment portfolio of the Fund, and, subject to such policies
as the board of directors of the Fund may determine, direct the purchase
and sale of investment securities in the day to day management of the
Fund. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way
or otherwise be deemed an agent of the Fund. However, one or more
shareholders, officers, directors or employees of the Adviser may serve as
directors and/or officers of the Fund, but without compensation or
reimbursement of expenses for such services from the Fund. Nothing herein
contained shall be deemed to require the Fund to take any action contrary
to its Articles of Incorporation or any applicable statute or regulation,
or to relieve or deprive the board of directors of the Fund of its
responsibility for and control of the affairs of the Fund.
3. Expenses. The Adviser, at its own expense and without
reimbursement from the Fund, shall furnish office space, and all necessary
office facilities, equipment and executive personnel for managing the
investments of the Fund and maintaining its organization. The Adviser
shall pay the salaries and fees of all officers and directors of the Fund
(except the fees paid to those directors who are not interested persons of
the Adviser, as defined in the Act, and who are not officers or employees
of the Fund). The Adviser shall also bear all sales and promotional
expenses of the Fund, except for expenses incurred in complying with laws
regulating the issue or sale of securities. Fees paid for attendance at
meetings of the Fund's board of directors to directors of the Fund who are
not interested persons of the Adviser, as defined in the Act, as amended,
or officers or employees of the Fund, shall be borne by the Fund. The
Fund shall bear all other expenses initially incurred by it, provided that
the total expenses borne by the Fund, including the Adviser's fee but
excluding all federal, state and local taxes, interest, brokerage
commissions and extraordinary items, shall not in any year exceed that
percentage of the average net asset value of the Fund for such year, as
determined by valuations made as of the close of each business day, which
is the most restrictive percentage provided by the state laws of the
various states in which the Fund's common stock is qualified for sale or,
if the states in which the Fund's common stock is qualified for sale
impose no such restrictions, 2%. The expenses of the Fund's operation
borne by the Fund include, by way of illustration and not limitation, the
costs of preparing and printing its registration statements required under
the Securities Act of 1933 and the Act (and amendments thereto), the
expense of registering its shares with the Securities and Exchange
Commission and in the various states, the printing and distribution cost
of prospectuses mailed to existing shareholders the cost of stock
certificates, director and officer liability insurance, reports to
shareholders, reports to government authorities and proxy statements,
interest charges, taxes, legal expenses, salaries of administrative and
clerical personnel, association membership dues, auditing and accounting
services, insurance premiums, brokerage and other expenses connected with
the execution of portfolio securities transactions, fees and expenses of
the custodian of the Fund's assets, expenses of calculating the net asset
value and repurchasing and redeeming shares, printing and mailing
expenses, charges and expenses of dividend disbursing agents, registrars
and stock transfer agents and the cost of keeping all necessary
shareholder records and accounts.
The Fund shall monitor its expense ratio on a monthly basis. If
the accrued amount of the expenses of the Fund exceeds the expense
limitation established herein, the Fund shall create an account receivable
from the Adviser for the amount of such excess. In such a situation the
monthly payment of the Adviser's fee will be reduced by the amount of such
excess, subject to adjustment month by month during the balance of the
Fund's fiscal year if accrued expenses thereafter fall below the expense
limitation.
4. Compensation of the Adviser. For the services and
facilities to be rendered and the charges and expenses to be assumed by
the Adviser hereunder, the Fund shall pay to the Adviser an advisory fee,
paid monthly, based on the average net asset value of the Fund, as
determined by valuations made as of the close of each business day of the
month. The advisory fee shall be 1/12 of 1% of such net asset value up to
and including $30,000,000, and 1/16 of 1% of the average net asset value
of the Fund in excess of $30,000,000. For any month in which this
Agreement is not in effect for the entire month, such fee shall be reduced
proportionately on the basis of the number of calendar days during which
it is in effect and the fee computed upon the average net asset value of
the business days during which it is so in effect.
5. Ownership of Shares of the Fund. Except in connection with
the initial capitalization of the Fund, the Adviser shall not take, and
shall not permit any of its shareholders, officers, directors or employees
to take a long or short position in the shares of the Fund, except for the
purchase of shares of the Fund for investment purposes at the same price
as that available to the public at the time of purchase.
6. Exclusivity. The services of the Adviser to the Fund
hereunder are not to be deemed exclusive and the Adviser shall be free to
furnish similar services to others so long as the services hereunder are
not impaired thereby. Although the Adviser has permitted and is
permitting the Fund to use the name "Fiduciary," it is understood and
agreed that the Adviser reserves the right to use and to permit other
persons, firms or corporations, including investment companies, to use
such name. During the period that this Agreement is in effect, the
Adviser shall be the Fund's sole investment adviser.
7. Liability. 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 Fund 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 that may be sustained in the purchase,
holding or sale of any security.
8. Brokerage Commissions. The Adviser may cause the Fund to
pay a broker-dealer which provides brokerage and research services, as
such services are defined in Section 28(e) of the Securities Exchange Act
of 1934 (the "Exchange Act"), to the Adviser a commission for effecting a
securities transaction in excess of the amount another broker-dealer would
have charged for effecting such transaction, if the Adviser determines in
good faith that such amount of commission is reasonable in relation to the
value of brokerage and research services provided by the executing
broker-dealer viewed in terms of either that particular transaction or his
overall responsibilities with respect to the accounts as to which he
exercises investment discretion (as defined in Section 3(a)(35) of the
Exchange Act).
9. Amendments. This Agreement may be amended by the mutual
consent of the parties; provided, however, that in no event may it be
amended without the approval of the board of directors of the Fund in the
manner required by the Act, and by the vote of the majority of the
outstanding voting securities of the Fund, as defined in the Act.
10. Termination. This Agreement may be terminated at any time,
without the payment of any penalty, by the board of directors of the Fund
or by a vote of the majority of the outstanding voting securities of the
Fund, as defined in the Act, upon giving sixty (60) days' written notice
to the Adviser. This Agreement may be terminated by the Adviser at any
time upon the giving of sixty (60) days' written notice to the Fund. This
Agreement shall terminate automatically in the event of its assignment (as
defined in Section 2(a)(4) of the Act). Subject to prior termination as
hereinbefore provided, this Agreement shall continue in effect for two (2)
years from the date hereof and indefinitely thereafter, but only so long
as the continuance after such two (2) year period is specifically approved
annually by (i) the board of directors of the Fund or by the vote of the
majority of the outstanding voting securities of the Fund, as defined in
the Act, and (ii) the board of directors of the Fund in the manner
required by the Act, provided that any such approval may be made effective
not more than sixty (60) days thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day first above written.
FIDUCIARY MANAGEMENT, INC.
By ___________________________ By _________________________________
Secretary President
FIDUCIARY CAPITAL GROWTH
FUND, INC.
By ___________________________ By _________________________________
Secretary President
