Exhibit (d1)
INVESTMENT ADVISORY AGREEMENT
This INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made by and between
XXXXXX XXXX INVESTMENT FUNDS, a business trust organized under the law of The
Commonwealth of Massachusetts (the "Trust"), and XXXXXX XXXX INVESTMENT
MANAGEMENT LLC, a corporation organized under the laws of the state of Delaware
(the "Adviser"), as of May 1, 2006.
WHEREAS, the Trust desires to appoint the Adviser as the investment adviser with
respect to those of its series which are listed on Schedule A to this Agreement
as may be amended from time to time (each such series being referred to herein
individually and collectively as the "Fund");
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Investment Description; Appointment
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The Trust desires to employ the Fund's capital by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in the Trust's Master Trust Agreement, as the same may from time to
time be amended, and in its Registration Statement 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 Trust. Copies of the Trust's
Registration Statement and Master Trust Agreement have been submitted to the
Adviser. The Trust agrees to provide copies of all amendments to the Trust's
Registration Statement and Master Trust Agreement to the Adviser on an on-going
basis. The Trust desires to employ and hereby appoints the Adviser to act as
investment adviser to the Fund. The Adviser accepts the appointment and agrees
to furnish the services described herein for the compensation set forth on
Schedule A attached hereto. In the event that the Trust desires to retain the
Adviser to render investment advisory services hereunder with respect to an
additional fund, and the Adviser is willing to render such services, Schedule A
shall be amended, whereupon such additional fund shall become a Fund hereunder.
2 Services as Investment Adviser
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Subject to the supervision and direction of the Board of Trustees of
the Trust, the Adviser will act in accordance with the Trust's Master Trust
Agreement, the Investment Company Act of 1940 and the Investment Advisors Act of
1940, as the same from time to time be amended, manage the Fund's assets in
accordance with its investment objective and policies as stated in the Trust's
Registration Statement as from time to time in effect, make investment decisions
and exercise voting rights in respect of portfolio securities for the Fund and
place purchase and sale orders on behalf of the Fund. In providing these
services, the Adviser will provide investment research and supervision of the
Fund's investments and conduct a continual program of investment, evaluation
and, if appropriate, sale and reinvestment of the Fund's assets. In addition,
the Adviser will furnish the Fund with whatever statistical information the Fund
may reasonably request with respect to the securities that the Fund may hold or
contemplate purchasing.
Subject to the supervision and direction of the Board of Trustees of
the Trust, the Adviser undertakes to perform the following administrative
services to the extent that no other party is obligated to perform them on
behalf of the Fund: (a) providing the Fund with office space (which may be the
Adviser's own offices), stationery and office supplies, (b) furnishing certain
corporate secretarial services, including assisting in the preparation of
materials for meetings of the Board of Trustees, (c) coordinating and
preparation of proxy statements and annual and semi-annual reports to the Fund's
shareholders, (d) assisting in the preparation of the Fund's tax returns, (e)
assisting in monitoring and developing compliance procedures for the Fund which
will include, among other matters, procedures for monitoring compliance with the
Fund's investment objective, policies, restrictions, tax matters and applicable
laws and regulations, and (f) acting as liaison between the Fund and the Fund's
independent public accountants, counsel, custodian or custodians, administrator
and transfer and dividend-paying agent and registrar, and taking all reasonable
action in the performance of its obligations under this Agreement to assure that
all necessary information is made available to each of them.
In performing all services under this Agreement, the Adviser shall act
in conformity with applicable law, the Trust's Master Trust Agreement and
By-Laws, and all amendments thereto, and the investment objective, investment
policies and other practices and policies set forth in the Trust's Registration
Statement, as such Registration Statement and practices and policies may be
amended from time to time.
3. Brokerage
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In executing transactions for the Fund and selecting brokers or
dealers, the Adviser will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Fund
transaction, the Adviser will consider all factors it deems relevant including,
but not limited to, 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 on
a continuing basis. In selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, the Adviser may
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Trust and
also to other accounts over which the Adviser or an affiliate exercises
investment discretion.
4. Information Provided to the Trust
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The Adviser will use its best efforts to keep the Trust informed of
developments materially affecting the Fund, and will, on its own initiative,
furnish the Trust from time to time whatever information the Adviser believes is
appropriate for this purpose.
5. Standard of Care
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The Adviser shall exercise its best judgment in rendering the services
described in paragraphs 2, 3 and 4 above. The Adviser shall not be liable for
any error of judgment or mistake
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of law or for any loss suffered by the Fund in connection with the matters to
which this Agreement relates, provided that nothing herein shall be deemed to
protect or purport to protect the Adviser against any liability to the Fund or
its shareholders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties from reckless disregard by it of its obligations and
duties under this Agreement ("disabling conduct"). The Fund will indemnify the
Adviser against, and hold it harmless from, any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses)
resulting from any claim, demand, action or suit not resulting from disabling
conduct by the Adviser. Indemnification shall be made only following: (i) a
final decision on the merits by a court or other body before whom the proceeding
was brought that the person to be indemnified was not liable by reason of
disabling conduct or (ii) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the person to be
indemnified was not liable by reason of disabling conduct by (a) the vote of a
majority of a quorum of non-party trustees who are not "interested persons" of
the Trust or (b) an independent legal counsel in a written opinion.
6. Compensation
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In consideration of the services rendered pursuant to Section 2 of this
Agreement, the Fund will pay the Adviser after the end of each calendar quarter
while this Agreement is in effect a fee for the previous quarter calculated at
an annual rate based on a percentage of the Fund's average daily net assets as
set forth in Schedule A.
Upon any termination of this Agreement before the end of a quarter, the
fee for such part of that quarter shall be prorated according to the proportion
that such period bears to the full quarterly period and shall be payable upon
the date of termination of this Agreement. For the purpose of determining fees
payable to the Adviser, the value of the Fund's net assets shall be computed at
the times and in the manner specified in the Trust's Registration Statement as
from time to time in effect.
7. Expenses
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The Adviser will bear all expenses in connection with the performance
of its services under this Agreement, including compensation of and office space
for its officers and employees connected with investment and economic research,
trading and investment management and administration of the Fund, as well as the
fees of all Trustees of the Trust who are affiliated with the Adviser or any of
its affiliates. The Fund will bear certain other expenses to be incurred in its
operation, including: organizational expenses; taxes, interest, brokerage costs
and commissions; fees of Trustees of the Trust who are not officers, directors,
or employees of the Adviser, the Fund's distributor or administrator or any of
their affiliates; Securities and Exchange Commission fees; state Blue Sky
qualification fees; charges of the custodian, any subcustodians, and transfer
and dividend-paying agents; insurance premiums; outside auditing, pricing and
legal expenses; costs of maintenance of the Trust's existence; costs
attributable to investor services, including, without limitation, telephone and
personnel expenses; costs of printing stock certificates; costs of preparing and
printing prospectuses and statements of additional information for regulatory
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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 Trust, membership fees in trade associations;
litigation and other extraordinary or non-recurring expenses. In addition, the
Fund will pay fees pursuant to any Distribution Plan adopted under Rule 12b-1 of
the Investment Company Act of 1940, as amended (the "1940 Act"), and pursuant to
any Shareholder Services Plan.
8. Services to Other Companies or Accounts
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The Trust understands that the Adviser now acts, will continue to act,
or may in the future act, as investment adviser to fiduciary and other managed
accounts or as investment adviser to one or more other investment companies, and
the Trust has no objection to the Adviser so acting, provided that whenever the
Fund and one or more other accounts or investment companies advised by the
Adviser have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with procedures believed to
be equitable to each entity. Similarly, opportunities to sell securities will be
allocated in an equitable manner. The Trust recognizes that in some cases this
procedure may adversely affect the size of the position that may be acquired or
disposed of for the Fund. In addition, the Trust understands that the persons
employed by the Adviser to assist in the performance of the Adviser's duties
hereunder will not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict the right of the Adviser or any
affiliate of the Adviser to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
9. Term of Agreement
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This Agreement shall become effective on the later of the date set
forth on Schedule A or the date this Agreement is approved by the shareholders
of the Fund, and shall continue for an initial one-year term and shall continue
thereafter so long as such continuance is specifically approved at least
annually by (i) the Board of Trustees of the Trust or (ii) a vote of a
"majority" (as defined in the 0000 Xxx) of the Fund'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. This Agreement is
terminable, without penalty, on 60 days' written notice, by the Board of
Trustees of the Trust or by vote of holders of a majority of the Fund's shares,
or upon 60 days' written notice, by the Adviser. This Agreement will also
terminate automatically in the event of its assignment (as defined in the 1940
Act).
10. Representation by the Trust
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The Trust represents that a copy of its Master Trust Agreement, dated
April 30, 1992, together with all amendments thereto, is on file in the office
of the Secretary of The Commonwealth of Massachusetts.
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11. Limitation of Liability
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It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the trust property
of the Fund, as provided in the Master Trust Agreement of the Trust. The
execution and delivery of this Agreement have been authorized by the Trustees
and the sole shareholder of Fund shares and signed by an authorized officer of
the Trust, acting as such, and neither such authorization by such Trustees and
shareholder nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the Fund as provided
in its Master Trust Agreement. The obligations of this Agreement shall be
binding only upon the assets and property of the Fund and not upon the assets
and property of any other sub-trust of the Trust.
12. Miscellaneous
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If the Adviser ceases to act as investment adviser to the Fund, the
Trust agrees that, at the request of the Adviser, the Trust's license to use
"Xxxxxx Xxxx" or any variation thereof indicating a connection to either of
those entities, will terminate and that the Trust will take all necessary action
to change the names of the Trust and the Fund to names that do not include
"Xxxxxx Xxxx" or any such variation.
13. Entire Agreement
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This Agreement constitutes the entire agreement between the parties
hereto.
14 Governing Law
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This Agreement shall be governed by and construed and enforced in
accordance with the laws of the state of New York without giving effect to the
conflicts of laws principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers as of the date first written above.
XXXXXX XXXX INVESTMENT FUNDS
On Behalf of the Funds Listed on Schedule A
By: /s/ Xxxxx Xxxxxx / Xxxx Whilesmith
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Title: CFO / Secretary
XXXXXX XXXX INVESTMENT MANAGEMENT LLC
By: /s/ Xxxxxxx Xxxxxxxx
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Title: VP
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AMENDED EXHIBIT A
TO THE
XXXXXX XXXX INVESTMENT FUNDS
INVESTMENT ADVISORY AGREEMENT
This Exhibit A, dated as of June 28, 2006, to be effective July 24,
2006, is Exhibit A to the Investment Advisory Agreement dated as of May 1, 2006,
between Xxxxxx Xxxx Investment Management LLC and Xxxxxx Xxxx Investment Funds.
FEE (AS A PERCENTAGE
NAME OF FUND OF NET ASSETS) EFFECTIVE DATE OF AGREEMENT
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Global High Yield Bond Fund .75% May 1, 2006
International Equity Fund .90% of the first $7.5 billion in average May 1, 2006
daily net asset; 0.88% on next $2.5
billion in average daily net assets;
and 0.85% on daily net assets over $10
billion
Total Return Bond Fund .45% May 1, 2006
International Equity Fund II .90% May 1, 2006
U.S. Microcap Fund 1.25% July 24, 2006
U.S. Smallcap Fund 0.95% July 24, 0000
X.X. Xxxxxx Fund 0.80% July 24, 2006
U.S. Multicap Fund 0.75% July 24, 2006
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