Exhibit (d-1)
INVESTMENT ADVISORY AGREEMENT
THE XXXXX FUNDS
February 14, 0000
Xxxx Xxxxx Management, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The Xxxxx Funds (the "Fund"), an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts, on behalf of the portfolios named
on Schedule I hereto, as such Schedule may be revised from time to time (each, a
"Portfolio"), hereby confirms its agreement with Xxxx Xxxxx Management, Inc.
("Xxxxx Management") as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund desires to employ the capital of each Portfolio by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in its Agreement and Declaration of Trust and in its Prospectus and
Statement of Additional Information, as from time to time in effect, and in such
manner and to such extent as may from time to time be approved by the Board of
Trustees of the Fund. Copies of the Fund's Prospectus, Statement of Additional
Information and Agreement and Declaration of Trust, as each may from time to
time be amended, have been or will be submitted to Xxxxx Management. The Fund
desires to employ and hereby appoints Xxxxx Management to act as the investment
manager for each Portfolio. Xxxxx Management accepts the appointment and agrees
to furnish the services for the compensation set forth below.
2. SERVICES AS INVESTMENT MANAGER
Subject to the supervision and direction of the Board of Trustees of the Fund,
Xxxxx Management will (a) act in strict conformity with the Fund's Agreement and
Declaration of Trust, the Investment Company Act of 1940 (the "1940 Act"), and
the Investment Advisers Act of 1940, as the same may from time to time be
amended; (b) manage each Portfolio in accordance with such Portfolio's
investment objective and policies as stated in the Fund's Prospectus and
Statement of Additional Information as from time to time in effect; (c) make
general investment decisions for each Portfolio involving decisions concerning
(i) the specific types of securities to be held by such Portfolio and the
proportion of such Portfolio's assets that should be allocated to such
investments during particular market cycles and (ii) the specific issuers whose
securities will be purchased or sold by such Portfolio; and (d) supply
statistical and research data; and general assistance in all aspects of the
Fund's operations with respect to each Portfolio. In providing those services,
Xxxxx Management will supervise each Portfolio's investments generally and
conduct a continual program of evaluation of such Portfolio's assets.
In connection with the performance of its duties under this Agreement, it is
understood that Xxxxx Management may from time to time employ or associate with
itself such person or persons as Xxxxx Management may believe to be particularly
fitted to assist it in the performance of this
Agreement, it being understood that the compensation of such person or persons
shall be paid by Xxxxx Management and that no obligation may be incurred on the
Fund's behalf in any such respect.
3. BROKERAGE
In executing transactions for each Portfolio and selecting brokers or dealers,
Xxxxx Management will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Portfolio
transaction, Xxxxx Management will consider all factors it deems relevant
including, but not limited to, the breadth of the market in the security, the
price of the security, the financial condition and execution capability of the
broker or dealer and the reasonableness of any commission for the specific
transaction and on a continuing basis. In selecting brokers or dealers to
execute a particular transaction and in evaluating the best overall terms
available, Xxxxx Management may consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as amended (the "1934 Act")) provided to each Portfolio and/or other accounts
over which Xxxxx Management or an affiliate exercises investment discretion.
Pursuant to the provisions of Section 11(a) of the 1934 Act, the Fund authorizes
Xxxxx Management to select a broker which is affiliated with Xxxxx Management.
In such case, the Fund consents that the broker may retain any compensation in
connection with effecting transactions. The Fund may revoke such consent at any
time upon written notice given to Xxxxx Management.
4. INFORMATION PROVIDED TO THE FUND
Xxxxx Management will keep the Fund informed of developments materially
affecting each Portfolio, and will, on its own initiative, furnish the Fund from
time to time with whatever information Xxxxx Management believes is appropriate
for this purpose.
In compliance with the requirements of Rule 31a-3 under the 0000 Xxx, Xxxxx
Management hereby agrees that all records that it maintains for the Fund in
respect of each Portfolio are the property of the Fund and further agrees to
surrender promptly to the Fund any of such records upon the Fund's request.
5. STANDARD OF CARE
Xxxxx Management shall exercise its best judgment in rendering the services
listed in paragraph 2 above. Xxxxx Management shall not be liable for any error
of judgment or mistake of law or for any loss suffered by any Portfolio in
connection with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect Xxxxx Management
against any liability to such Portfolio or to its shareholders to which Xxxxx
Management would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or by
reason of Xxxxx Management's reckless disregard of its obligations and duties
under this Agreement.
6. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, each
Portfolio will pay Xxxxx Management on the first business day of each month a
fee for the previous month at the annual rate set forth opposite such
Portfolio's name on Schedule I hereto. The fee for the period from the effective
date of this Agreement to the end of the month in which such date occurs shall
be prorated according to the proportion that such period bears to the full
monthly period. Upon
any termination of this Agreement before the end of a month, the fee for such
part of that month shall be prorated according to the proportion that such
period bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
Xxxxx Management, the value of each Portfolio's net assets shall be computed at
the times and in the manner specified in the Fund's Prospectus and Statement of
Additional Information as from time to time in effect.
7. EXPENSES
Xxxxx Management will bear all expenses in connection with the performance of
its services under this Agreement. The Fund or the relevant Portfolio will bear
certain other expenses to be incurred in its operation, including: taxes,
interest, brokerage fees and commissions, if any; fees of Trustees of the Fund
who are not officers, directors or employees of Xxxxx Management or any of its
affiliates; SEC fees and state Blue Sky qualification fees; charges of
custodians and transfer and dividend disbursing agents; charges of any
independent pricing service retained to assist in valuing the assets of such
Portfolio; the Fund's proportionate share of insurance premiums; outside
auditing and legal expenses; costs of maintenance of the Fund's existence; costs
attributable to shareholder services, including, without limitation, telephone
and personnel expenses; costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders; costs of shareholders' reports and
meetings of the shareholders of the Fund and of the officers or Board of
Trustees of the Fund; and any extraordinary expenses. Fund-wide expenses not
specifically identifiable to a Portfolio will be allocated among all Portfolios
in such manner as Xxxxx Management shall, in its reasonable judgment, determine
to be fair and equitable to all Portfolios.
8. REIMBURSEMENT TO A PORTFOLIO
If in any fiscal year the aggregate operating expenses of such Portfolio
(including fees pursuant to this Agreement, but excluding interest, taxes,
brokerage expenses and distribution expenses and, if permitted by state
securities commissions, extraordinary expenses) exceed the expense limitation
imposed by any state having jurisdiction over the Portfolio, Xxxxx will
reimburse the Portfolio for such excess expense. Such expense reimbursement, if
any, will be estimated, reconciled and paid on a monthly basis.
9. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Fund understands that Xxxxx Management now acts, will continue to act and
may act in the future as investment adviser to fiduciary and other managed
accounts and as investment manager to one or more other investment companies,
and the Fund has no objection to Xxxxx Management so acting, provided that
whenever a Portfolio and one or more other accounts or investment companies
advised by Xxxxx Management have available funds for investment, investments
suitable and appropriate for each will be allocated in accordance with a formula
believed to be equitable to each entity. The Fund recognizes that in some cases
this procedure may adversely affect the size of the position obtainable for a
Portfolio. In addition, the Fund understands that the persons employed by Xxxxx
Management to assist in the performance of Xxxxx Management's duties under this
Agreement will not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict the right of Xxxxx Management or any
affiliate of Xxxxx Management to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
10. TERM OF AGREEMENT
This Agreement shall become effective as of the date first set forth above and,
as to each Portfolio, shall continue until the date set forth opposite such
Portfolio's name on Schedule I hereto (the "Reapproval Date), and thereafter
shall continue automatically for successive annual periods, provided such
continuance is specifically approved at least annually by (i) the Board of
Trustees of the Fund or (ii) a vote of a "majority" (as defined in the 0000 Xxx)
of such Portfolio's outstanding voting securities, provided that in either event
the continuance is also approved by a majority of the Board of Trustees 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. As to each Portfolio, this Agreement is terminable, without
penalty by the Portfolio, on 60 days' written notice, by the Board of Trustees
of the Fund or by vote of a majority of the Portfolio's outstanding voting
securities, or upon 60 days' written notice, by Xxxxx Management. This Agreement
will also terminate automatically in the event of its assignment (as defined in
the 1940 Act and the rules thereunder).
11. REPRESENTATION BY THE FUND
The Fund represents that a copy of its Agreement and Declaration of Trust, dated
March 20, 1986, together with all amendments thereto, is on file in the office
of the Secretary of the Commonwealth of Massachusetts.
12. LIMITATION OF LIABILITY
This Agreement has been executed on behalf of the Fund in respect of each
Portfolio by the undersigned officer of the Fund in his capacity as an officer
of the Fund. The obligations of this Agreement shall be binding on the assets
and property of the relevant Portfolio only and shall not be binding on any
other Portfolio or any Trustee, officer or shareholder of the Fund individually.
13. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws
(except the conflict of law rules) of the State of New York.
If the foregoing is in accordance with your understanding, kindly indicate your
acceptance of this Agreement by signing and returning the enclosed copy of this
Agreement.
Very truly yours,
THE XXXXX FUNDS
By: /s/ Xxx Xxxxxx
----------------------
Authorized Officer
Accepted and Agreed:
XXXX XXXXX MANAGEMENT, INC.
By: /s/ Xxx Xxxxxx
--------------------------
Authorized Officer
SCHEDULE I
ANNUAL FEE AS A PERCENTAGE
NAME OF PORTFOLIO OF AVERAGE DAILY NET ASSETS REAPPROVAL DATE
----------------- --------------------------- ---------------
Xxxxx SmallCap Growth Fund .81% September 30, 0000
Xxxxx XxxXxx Growth Fund .76% September 30, 0000
Xxxxx LargeCap Growth Fund .71% September 30, 0000
Xxxxx SmallCap and MidCap Growth Fund .81% September 30, 0000
Xxxxx Capital Appreciation Fund .81% September 30, 0000
Xxxxx Health Sciences Fund .81% September 30, 0000
Xxxxx Balanced Fund .71% September 30, 0000
Xxxxx Core Fixed-Income Fund .335% September 30, 0000
Xxxxx Money Market Fund .46% September 30, 2008
