EXHIBIT (D)(1)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 16th day of January, 2004, between Xxxxxxxx Xxxxx
Funds, Inc., a Wisconsin corporation (the "Corporation"), and Xxxxxxxx
Investment Management, LLC, a Delaware limited liability company (the
"Adviser").
W I T N E S S E T H
WHEREAS, the Corporation is an open-end, management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Corporation is authorized to issue shares of its Common
Stock, $.001 par value per share, in one or more series;
WHEREAS; the Adviser is, or will be prior to the effective date of this
Agreement, registered as an investment adviser under the Investment Advisers Act
of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Corporation desires to retain the Adviser to render
investment advisory services to certain of its series and the Adviser is willing
to render such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Adviser. The Corporation hereby appoints the
Adviser to act as investment adviser with respect to each mutual fund series
described on Exhibit A hereto (individually, a "Fund" and collectively, the
"Funds") for the periods and on the terms herein set forth. The Adviser accepts
such appointment and agrees to render the services herein set forth, for the
compensation herein provided. Additional Funds may be added to this Agreement by
amendment to Exhibit A and without the necessity for reapproval of this
Agreement by any Fund then already covered by this Agreement.
2. Duties of Adviser.
(a) Subject to the general supervision of the Board of
Directors of the Corporation, the Adviser shall manage the investment operations
of each Fund and the composition of each Fund's assets, including the purchase,
retention and disposition thereof. In this regard, the Adviser, with respect to
each Fund:
(i) shall provide supervision of the Fund's
assets, furnish a continuous investment program for the Fund, determine from
time to time what investments or securities will be purchased, retained or sold
by the Fund, and what portion of the assets will be invested or held uninvested
as cash;
(ii) shall place orders pursuant to its
determinations either directly with the issuer or with any broker and/or dealer
who deals in the securities in which the Fund is active; in placing orders, the
Adviser shall be entitled to rely upon the provisions of Section 28(e) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
(iii) may, on occasions when it deems the purchase
or sale of an asset to be in the best interests of the Fund as well as one or
more other clients (including any other investment company or
advisory account for which the Adviser acts as adviser), aggregate, to the
extent permitted by applicable laws and regulations, the securities to be sold
or purchased in order to obtain a more favorable net price or execution; in such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other clients.
(b) The Adviser, in the performance of its duties to each
Fund hereunder, shall (i) act in conformity with the Articles and By-Laws of the
Corporation; the Prospectus, Statement of Additional Information and
Registration Statement in respect of the Fund; all codes, policies and
procedures maintained by the Company and applicable to the Adviser, including
without limitation codes of ethics or conduct and proxy voting policies; and the
instructions and directions of the Board of Directors of the Corporation; and
(ii) comply with and conform to the requirements of the 1940 Act, the Securities
Act of 1933, as amended, the Exchange Act and all other applicable federal and
state laws, regulations and rulings.
(c) The Adviser shall at all times maintain its
registration as an investment adviser under the Advisers Act and comply in all
material respects with the requirements of the Advisers Act.
(d) The Adviser shall provide, at its own expense, such
office space, personnel, facilities, equipment and other materials, resources
and assets as are necessary or appropriate for the provision of its services
hereunder.
(e) The Adviser shall render to the Board of Directors of
the Corporation such periodic and special reports and information as the Board
may reasonably request.
(f) The services of the Adviser hereunder are not deemed
exclusive and the Adviser shall be free to render similar services to others so
long as its services under this Agreement are not impaired thereby.
(g) Subject to Section 36 of the 1940 Act, the Adviser
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the matters to which this Agreement
relates, except for liability to a Fund or its shareholders to which the Adviser
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 under this Agreement.
3. Expenses.
(a) During the term of this Agreement, the Adviser will
pay all costs incurred by it in connection with the performance of its duties
under paragraph 2 hereof, other than the cost (including taxes and brokerage
commissions, if any) of assets purchased or sold for the Fund.
(b) In addition to the foregoing, the Adviser may from
time to time at its option (but shall be under no obligation to) voluntarily
assume or undertake to reimburse a Fund for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Adviser. Any such voluntary
assumption or undertaking may be discontinued or modified at any time by the
Adviser.
4. Compensation. For the services provided and the expenses
assumed by the Adviser pursuant to this Agreement, each Fund will pay the
Adviser, and the Adviser agrees to accept as full compensation for all services
rendered by it hereunder, an annual management fee as shown on Exhibit A
attached hereto. The foregoing fee will be computed based on the value of net
assets on each day and will be paid to the Adviser monthly in arrears.
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5. Books and Records. The Adviser shall maintain all of the
Fund's records that relate to the provision of investment advisory services and
transactions in portfolio securities for the Fund. The Adviser agrees that all
records which it maintains for the Fund are the property of the Fund and it will
surrender promptly to the Fund any of such records upon the Fund's request. The
Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 of
the Commission under the 1940 Act any such records as are required to be
maintained by it pursuant to Rule 31a-1 of the Commission under the 1940 Act.
6. Duration and Termination. This Agreement will become effective
with respect to a Fund upon approval of a majority of the outstanding voting
securities of such Fund (as defined in the 1940 Act). Unless terminated as
hereinafter provided, this Agreement shall continue in effect for two years from
effectiveness of this Agreement as to such Fund, and thereafter shall continue
automatically for successive periods of one year each so long as each such
latter continuance is approved at least annually by (i) the vote of a majority
of the Board of Directors of the Corporation who are not parties to this
Agreement or "interested persons" (as defined in the 0000 Xxx) of any such
party, cast in person at a meeting called for the purpose of voting on such
approval; and (ii) either by a vote of a majority of the Board of Directors of
the Corporation or by vote of a majority of the outstanding shares of such Fund
(as defined with respect to voting securities in the 1940 Act). This Agreement
may be terminated as to any Fund at any time, without the payment of any
penalty, by the Board of Directors of the Corporation or by vote of a majority
of the outstanding shares of such Fund (as so defined) on 60 days' written
notice to the Adviser, or by the Adviser at any time, without the payment of any
penalty, on 60 days' written notice to the Corporation. This Agreement will
automatically and immediately terminate in the event of its assignment (as
defined in the 1940 Act and the rules thereunder).
7. Name of the Fund. The Adviser agrees that the words "Xxxxxxxx
Xxxxx," "Xxxxxxxx" or "Xxxxx" may be used in the name of the Corporation and any
mutual fund series and that such name, any related logos and any service marks
containing the words "Xxxxxxxx Plumb," "Xxxxxxxx" or "Xxxxx" may be used in
connection with their business in perpetuity and that such use shall be royalty
free, whether or not this Agreement or any other advisory agreement with the
Adviser is in effect for the Funds. The Corporation acknowledges that it has no
rights to the name "Xxxxxxxx Plumb," "Xxxxxxxx" or "Xxxxx" or such logos or
service marks other than those granted in this paragraph and that the Adviser
reserves to itself the right to grant the nonexclusive right to use the words
"Xxxxxxxx Xxxxx," "Xxxxxxxx" or "Xxxxx" or such logos or service marks to any
other person, including, but not limited to, another investment company.
8. Status of Adviser as 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 of
Directors of the Corporation from time to time, have no authority to act for or
represent the Corporation in any way or otherwise be deemed an agent of the
Corporation.
9. Amendment of Agreement. This Agreement may be amended by
mutual consent, but the consent of a Fund must be approved (a) by vote of a
majority of those Directors of the Corporation who are not parties to this
Agreement or interested persons (as defined in the 0000 Xxx) of any such party,
which vote shall be cast in person at a meeting called for the purpose of voting
on such amendment, and (b) if such amendment materially changes the advisory
relationship or this Agreement or otherwise requires shareholder approval under
the 1940 Act, by vote of a majority of the outstanding shares of such Fund (as
defined with respect to voting securities in the 1940 Act).
10. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit 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 this Agreement shall not be
affected thereby. This Agreement shall be construed in accordance with
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applicable federal law and the laws of the State of Wisconsin and shall be
binding up and shall inure to the benefit of the parties hereto and their
respective successors, subject to paragraph 6 hereof. Anything herein to the
contrary notwithstanding, this Agreement shall not be construed to require, or
to impose any duty upon, either of the parties to do anything in violation of
any applicable laws or regulations. This Agreement supersedes any prior
agreement between the parties with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the date first above written.
XXXXXXXX PLUMB FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, President
XXXXXXXX INVESTMENT MANAGEMENT, LLC
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, President
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EXHIBIT A TO INVESTMENT ADVISORY AGREEMENT
BETWEEN XXXXXXXX PLUMB FUNDS, INC.
AND
XXXXXXXX INVESTMENT MANAGEMENT, LLC
1. Growth Fund.
The management fee of this Fund, calculated in accordance with
Paragraph 4 of the Investment Advisory Agreement, shall be at the
annual rate of 1.00% of the first $50 million of average daily net
assets of the Fund, and 0.90% of average daily net assets in excess of
$50 million.
2. Bond Fund.
The management fee for this Fund, calculated in accordance with
Paragraph 4 of the Investment Advisory Agreement, shall be at the
annual rate of 0.65% of the first $50 million of average daily net
assets of the Fund, and 0.60% of average daily net assets in excess of
$50 million.
