INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 31st day of May, 1997, by and between MAS Funds (the
"Fund"), a business trust organized under the laws of the Commonwealth of
Pennsylvania, and Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP (or any successor-in-interest
(by merger or otherwise) thereto or transferee thereof that does not involve an
"assignment" within the meaning of the Investment Company Act of 1940 and that
is a limited liability partnership or other entity wholly owned, directly or
indirectly, by Xxxxxx Xxxxxxx Asset Management Holdings, Inc. and/or its
affiliates; Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP or such successor-in-interest or
transferee being referred to herein as the "Adviser").
1. Duties of Adviser. The Fund hereby appoints the Adviser to act as
investment adviser to each of the Portfolios listed on Schedule A hereto (the
"Portfolios"), for the period and on such terms set forth in this Agreement. The
Fund employs the Adviser to manage the investment and reinvestment of the assets
of the Portfolios, to continuously review, supervise and administer the
investment program of each of the Portfolios, to determine in its discretion the
securities to be purchased or sold and the portion of each such Portfolio's
assets to be held uninvested, to provide the Fund with records concerning the
Adviser's activities which the Fund is required to maintain, and to render
regular reports to the Fund's officers and Board of Trustees concerning the
Adviser's discharge of the foregoing responsibilities. The Adviser shall
discharge the foregoing responsibilities subject to the control of the officers
and the Board of Trustees of the Fund, and in compliance with the objectives,
policies and limitations set forth in the Fund's prospectus and applicable laws
and regulations. The Adviser accepts such employment and agrees to render the
services and to provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein.
2. Portfolio Transactions. The Adviser is authorized to select the brokers
or dealers that will execute the purchases and sales of securities for each of
the Portfolios and is directed to use its best efforts to obtain the best
available price and most favorable execution, except as prescribed herein.
Subject to policies established by the Board of Trustees of the Fund, the
Adviser may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if the
Adviser determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Adviser's overall responsibilities with respect to the Fund. The execution of
such transactions shall not be deemed to represent an unlawful act or breach of
any duty created by this Agreement or otherwise. The Adviser will promptly
communicate to the officers and Trustees of the Fund such information relating
to portfolio transactions as they may reasonably request.
3. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser at the end of each of the Fund's fiscal quarters, an advisory fee
calculated by applying a quarterly rate, based on the annual percentage rates
set forth opposite each Portfolio's name on Schedule A hereto, to each
Portfolio's average daily net assets for the quarter.
In the event of termination of this Agreement, the fee provided
under this Section shall be computed on the basis of the period ending on the
last business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current fiscal quarter as
a percentage of the total number of days in such quarter.
4. Other Services. At the request of the Fund, the Adviser, in its
discretion may make available to the Fund office facilities, equipment,
personnel and other services. Such office facilities, equipment, personnel and
services shall be provided for or rendered by the Adviser and billed to the Fund
at the Adviser's cost.
5. Reports. The Fund and the Adviser agree to furnish to each other current
prospectuses, proxy statements, reports to shareholders, certified copies of
their financial statements, and such other information with regard to their
affairs as each may reasonably request.
6. Status of Adviser. The services of the Adviser to the Fund are not to be
deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby.
7. Liability of Adviser. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act, the Adviser shall
not be subject to any liability whatsoever to the Fund, or to any shareholder of
the Fund, for any error or judgment, mistake of law or any other act or omission
in the course of, or connected with, rendering services hereunder including,
without limitation, for any losses that may be sustained in connection with the
purchase, holding, redemption or sale of any security on behalf of any Portfolio
of the Fund.
8. Permissible Interests. Subject to and in accordance with the Declaration
of Trust of the Fund and the Partnership Agreement (or other governing or
organizational documents) of the Adviser, Trustees, agents and shareholders of
the Fund are or may be interested in the Adviser (or any successor thereof) as
officers or partners, or otherwise; officers, agents and partners of the Adviser
are or may be interested in the Fund as Trustees, officers, shareholders or
otherwise; and the Adviser (or any successor) is or may be interested in the
Fund as a shareholder or otherwise. The
effect of any such interrelationships shall be governed by said Declaration of
Trust or Partnership Agreement (or other governing or organizational documents)
and provisions of the Investment Company Act.
9. Declaration of Trust. The Adviser is hereby expressly put on notice of
the limitation of shareholder liability as set forth in Article VIII of the
Declaration of Trust of the Fund and agrees that the obligations assumed by the
Fund pursuant to this Agreement shall be limited in all cases to the Fund and
its assets, and the Adviser shall not seek satisfaction of any such obligation
from the shareholders or any shareholder of the Fund. Nor shall the Adviser seek
satisfaction of any such obligations from the Trustees or any individual
Trustee.
10. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall continue until May 31, 1999 and thereafter for additional
periods of one year from the anniversary thereof, but only so long as such
continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Board of Trustees of the Fund who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Board of Trustees of the Fund or by vote of a majority of the outstanding
voting securities of each Portfolio of the Fund; provided, however, that if the
holders of any Portfolio fail to approve the Agreement as provided herein, the
Adviser may continue to serve in such capacity in the manner and to the extent
permitted by the Investment Company Act and Rules thereunder. This Agreement may
be terminated by any Portfolio of the Fund at any time, without the payment of
any penalty, by vote of a majority of the entire Board of Trustees of the Fund
or by vote of a majority of the outstanding voting securities of the Portfolio
on 60 days' written notice to the Adviser. This Agreement may be terminated by
the Adviser at any time, without the payment of any penalty, upon 90 days'
written notice to the Fund. This Agreement will automatically and immediately
terminate in the event of its assignment. Any notice under this Agreement shall
be given in writing, addressed and delivered or mailed postpaid, to the other
party at any office of such party.
As used in this Section 10, the terms "assignment," "interested
persons," and "a vote of a majority of the outstanding voting securities" shall
have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and
Section 2(a)(42) of the Investment Company Act.
11. Amendment of Agreement. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by a vote of a
majority of those members of the Board of Trustees of the Fund who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such amendment, and (b)
by vote of a majority of the outstanding voting securities of each Portfolio of
the Fund.
12. Severability. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of this 31st day of May, 1997.
XXXXXX XXXXXXXX & XXXXXXXX, LLP MAS FUNDS
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxxx Xxxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxxxx Xxxxxx
Title: Principal - Xxxxxx Xxxxxxx Title: Vice President
Schedule A
Portfolio Rate
---------- ------
Advisory Foreign Fixed Income .375%
Advisory Mortgage .375%
Balanced .450%
Balanced Plus .550%
Cash Reserves .250%
Domestic Fixed Income .375%
Emerging Markets .750%
Equity .500%
Fixed Income .375%
Fixed Income II .375%
Global Fixed Income .375%
Growth .500%
High Yield .375%
Intermediate Duration .375%
International Fixed Income .375%
International Equity .500%
Limited Duration .300%
Mid Cap Growth .500%
Mid Cap Value .750%
Mortgage-Backed Securities .375%
Multi-Asset-Class .650%
Municipal .375%
NY Municipal .375%
PA Municipal .375%
Small Cap Value .750%
Special Purpose Fixed Income .375%
Value .500%
