EXHIBIT 4(a)
RESTATED
The Xxxxxxx Funds, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
October 21, 2004
Xxxxxxx Investment Management L.L.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
INVESTMENT ADVISORY AGREEMENT
Dear Sirs:
The Xxxxxxx Funds, Inc. (the "Fund"), a corporation organized under the
laws of the State of Maryland, confirms its agreement with Xxxxxxx Investment
Management L.L.C. (the "Investment Adviser") as follows:
1. Appointment of Investment Adviser. The Fund desires to employ its
capital by investing and reinvesting in investments of the kind and in
accordance with the limitations specified in its Articles of Incorporation, as
amended from time to time (the "Charter"), in its Prospectus and Statement of
Additional Information, and in the manner and to the extent as may from time to
time be approved by the Board of Directors of the Fund. The Fund desires to
employ and hereby appoints the Investment Adviser to act as investment adviser
of the Fund. For the purposes of this Agreement, shares of the Fund may be
classified into shares of a number of separate portfolios of assets (each a
"Portfolio" and together the "Portfolios"), such group of Portfolios in the
aggregate comprising the Fund. All references herein to this Agreement shall be
deemed to be references to this Agreement, as it may from time to time be
supplemented by the addition or subtraction of one or more Portfolios as set
forth on Schedule A hereto as it may be amended from time to time. The
Investment Adviser accepts the appointment and agrees to furnish the services
herein set forth for the compensation stated herein. This Agreement is hereby
adopted for each Portfolio listed on Schedule A hereto.
2. Delivery of Fund Documents. The Fund shall furnish the Investment
Adviser with copies properly certified or authenticated of each of the
following:
(a) Charter of the Fund;
(b) By-Laws of the Fund, as amended from time to time;
(c) Resolutions of the Board of Directors of the Fund authorizing
the appointment of Xxxxxxx Investment Management L.L.C. as
Investment Adviser and approving the form of this Agreement;
(d) Registration Statement under the Securities Act of 1933, as
amended (the "1933 Act"), and the Investment Company Act of
1940, as amended (the "1940 Act") on Form N-1A (File Nos.
33-98310; 811-9114) as filed with the Securities and Exchange
Commission on October 18, 1995, and all amendments thereto
relating to an indefinite number of shares of common stock,
$.001 par value;
(e) Prospectus and Statement of Additional Information of the Fund
relating to the Fund's shares in effect under the 1933 Act
(such Prospectus, Statement of Additional Information and
supplements thereto, as presently in effect and as from time
to time amended and supplemented, herein called the
"Prospectus").
The Fund will furnish the Investment Adviser from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Name of Fund. The Fund may use any name derived from the name "Xxxxxxx
Investment Management L.L.C." only for so long as this Agreement or any other
Investment Advisory Agreement between the Investment Adviser and the Fund or any
extension, renewal or amendment hereof or thereof remains in effect, including
any similar agreement with any organization which shall have succeeded to the
Investment Adviser's business as investment adviser. At such time as such an
agreement shall no longer be in effect, the Fund will (to the extent that it
lawfully can) cease to use such name or any other name indicating that it is
advised by or otherwise connected with the Investment Adviser or any
organization which shall have so succeeded to the Investment Adviser's business.
The Fund acknowledges that the Investment Adviser may have granted and may grant
the non-exclusive right to use the name "Xxxxxxx" to any other corporation or
entity, including but not limited to any investment company of which the
Investment Adviser or any subsidiary or affiliate thereof or any successor to
the business thereof shall be an investment adviser.
4. Services Provided by Investment Adviser. Subject to the supervision and
direction of the Board of Directors of the Fund, the Investment Adviser will (a)
act in strict conformity with the Fund's Articles of Incorporation, the 1940 Act
and the Investment Advisers Act of 1940, as amended, (b) manage the Fund's
assets and furnish a continual investment program for the Fund in accordance
with the Fund's investment objective and policies as described in the Fund's
Prospectus and Statement of Additional Information, (c) make investment
decisions for the Fund, (d) provide the Fund with investment research and
statistical data, advice and supervision, data processing and clerical services,
(e) provide the Fund with office facilities which may be the Investment
Adviser's own offices, (f) determine what securities shall be purchased for the
Fund, what securities shall be held or sold by the Fund, and what portion of the
Fund's assets shall be held uninvested, (g) review asset allocations and
investment policies with the Board of Directors of the Fund every quarter, and
(h) advise and assist the officers of the Fund in taking such steps as are
necessary or appropriate to carry out the
-2-
decisions of the Board of Directors of the Fund and its committees with respect
to the foregoing matters and the conduct of the business of the Fund. In
addition, the Investment 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.
The Investment Adviser will keep the Fund informed of developments
materially affecting the Fund's assets, and will, on its own initiative, furnish
the Fund from time to time with whatever information the Investment Adviser
believes is appropriate for this purpose.
The Investment Adviser agrees and acknowledges that any records prepared
or maintained under the provisions of Rule 31a-2(e) under the 1940 Act are
property of the Fund. The Adviser further agrees and acknowledges that all such
records will be surrendered promptly upon request of the Fund.
5. Allocation of Charges and Expenses. The Investment Adviser will make
available, without expense to the Fund, the services of such of its officers,
directors and employees as may be duly elected officers or directors of the
Fund, subject to the individual consent of such persons to serve and to any
limitations imposed by law. The Investment Adviser will pay all expenses
incurred in performing its investment advisory services under this Agreement,
including compensation of and office space for officers and employees of the
Fund connected with investment and economic research, trading and investment
management of the Fund, as well as the fees of all Directors of the Fund who are
"affiliated persons" of the Investment Adviser, as that term is defined in the
1940 Act, or any of its "affiliated persons". The Investment Adviser will not be
required to pay any expenses of the Fund other than those specifically allocated
to it in this Paragraph 5. In particular, but without limiting the generality of
the foregoing, the Fund will be required to pay: organization and offering
expenses; fees and expenses incurred by the Fund in connection with membership
in investment company organizations; brokerage and other expenses of executing
portfolio transactions; legal, auditing or accounting expenses; taxes or
governmental fees; the fees and expenses of any administrator, transfer agent,
registrar, dividend disbursing agent or shareholder servicing agent of the Fund;
the cost of preparing share certificates or any other expenses, including
clerical expenses, of issue or repurchase of shares of capital stock (the
"Shares") of the Fund; interest charges and other costs of borrowing funds; the
expenses of and fees for registering or qualifying securities for sale and of
maintaining the registration of the Fund; the fees and expenses of Directors of
the Fund who are not affiliated with the Investment Adviser; the cost of
preparing and distributing reports and notices to shareholders and reports to
regulatory agencies; the costs and/or fees incident to directors' and
shareholders' meetings; the cost of preparing and mailing proxy materials; the
costs and/or fees incident to the listing (and maintenance of such listing) of
the Fund's shares on stock exchanges; the fees or disbursements of custodians
and subcustodians of the Fund's assets, including expenses incurred in the
performance of any obligations enumerated by the Charter or By-Laws of the Fund
insofar as they govern agreements with any such custodian; the cost of office
supplies, including stationery; travel expenses of all offices and employees of
the Fund; litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's business.
You may from time to time agree in a separate written fee waiver agreement
not to impose all or a portion of your fee otherwise payable hereunder (in
advance of the time such fee
-3-
or portion thereof would otherwise accrue) and/or undertake to make arrangements
to limit a Portfolio's expenses to specified levels (in advance of the time such
expenses would otherwise accrue), which agreement or arrangements may be
effected at any time, should be described in each Portfolio's prospectus or an
appropriate sticker, and may be discontinued or modified by you at any time,
consistent with the terms of any such agreement or arrangements.
6. Compensation of the Adviser. In consideration of all services to be
rendered, facilities furnished and expenses paid or assumed by the Investment
Adviser pursuant to this Agreement, the Fund will pay to the Investment Adviser,
and the Investment Adviser will accept, a monthly fee on the first business day
of each month, based upon the average daily value (as determined on each
business day at the time set forth in the Prospectus for determining net asset
value per share) of the net assets of each Portfolio during the preceding month,
at the respective rates in accordance with Schedule A hereto, except as may be
modified by Paragraph 5 hereof.
7. Services to Other Accounts. The Fund understands that the Investment
Adviser now acts, will continue to act and may act in the future as investment
adviser to fiduciary and other managed accounts, and the Fund has no objection
to the Investment Adviser so acting, provided that whenever the Fund and one or
more other accounts advised by the Investment Adviser are prepared to purchase,
or desire to sell, the same security, available investments or opportunities for
sales will be allocated in a manner believed by the Investment Adviser to be
equitable to each entity. The Fund recognizes that in some cases this procedure
may affect adversely the price paid or received by the Fund or the size of the
position purchased or sold by the Fund. In addition, the Fund understands that
the persons employed by the Investment Adviser to provide services to the Fund
in connection with the performance of the Investment Adviser's duties under this
Agreement will not devote their full time to those services. Moreover, nothing
contained in this Agreement will be deemed to limit or restrict the right of the
Investment Adviser or any "affiliated person" of the Investment Adviser to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature to other persons or entities, including
serving as investment adviser to, or employee, officer, director or trustee of,
other investment companies.
8. Brokerage; Avoidance of Conflicts of Interest. In connection with
purchases or sales of portfolio securities for the account of the Fund, neither
the Investment Adviser nor any of its directors, officers or employees will act
as a principal or agent or receive any commission with respect to such purchases
or sales. The Investment Adviser or its agents shall arrange for the placing of
all orders for the purchase and sale of portfolio securities for the Fund's
account with brokers or dealers selected by the Investment Adviser. In the
selection of such brokers or dealers and the placing of such orders, the
Investment Adviser will use its best efforts to seek for the Fund the most
favorable execution and net price available and will consider all factors it
deems relevant in making such decisions including, but not limited to, price
(including any applicable brokerage commission or dealer spread), size of order,
difficulty of execution, and operational facilities of the firm involved and the
firm's risk in positioning a block of securities.
The parties agree that it is in the interests of the Fund that the
Investment Adviser have access to supplemental investment and market research
and security and economic analyses provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when brokerage is
allocated to other brokers on the basis of the best price and
-4-
execution. The Investment Adviser is authorized to place orders for the purchase
and sale of securities for the Fund with such brokers, subject to review by the
Fund's directors from time to time. In selecting brokers or dealers to execute a
particular transaction and in evaluating the best price and execution available,
the Investment Adviser may consider the brokerage and research services (as such
terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) provided to the Fund and/or other accounts over which the Investment
Adviser exercises investment discretion.
9. Standard of Care. The Investment Adviser will exercise its best
judgment in rendering the services described in Paragraph 4 above. The
Investment 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 a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by the Investment Adviser of its obligations and duties under
this Agreement, or a loss resulting from a breach of fiduciary duty with respect
to receipt of compensation for services (in which case any award of damages
shall be limited to the period and amount set forth in Section 36(b)(3) of the
1940 Act). Any person, even though an officer, director, employee, or agent of
the Investment Adviser, who may be or become an officer, director, employee or
agent of the Fund, will be deemed, when rendering services to the Fund, to be
rendering such services to, or acting solely for, the Fund and not as an
officer, director, employee or agent, or one under the control or direction of
the Investment Adviser, even though paid by it.
10. Duration and Termination of This Agreement. This Agreement shall be
effective as to a particular Portfolio as of the date of the commencement of the
public sale of the shares of that Portfolio and unless sooner terminated as
provided herein, shall continue in effect as to a particular Portfolio for an
initial term of two years, and shall continue on an annual basis thereafter, but
only so long as such continuance is specifically approved at least annually
during the 90 days prior to and including the anniversary of the effective date
of the prior continuance, or on another schedule as approved by the Board of
Directors which complies with the requirements of the 1940 Act, (a) by the vote
of a majority of the Directors who are not interested persons of the Investment
Adviser or of the Fund, cast in person at a meeting called for the purpose of
voting on such approval and (b) by a vote of the Board of Directors or of a
majority of the outstanding voting securities of that Portfolio. The aforesaid
requirement that continuance of this Agreement be specifically approved at least
annually shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder. This Agreement may, on 60 days' written
notice, be terminated with respect to any Portfolio at any time without the
payment of any penalty, by the Board of Directors of the Fund, or by vote of a
majority of the outstanding voting securities of the Fund, or by the Investment
Adviser. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this Agreement, the definitions
contained in Section 2(a) of the 1940 Act (particularly the definitions of
"interested person", "assignment" and "majority of the outstanding voting
securities"), as from time to time amended, shall be applied, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order.
11. Amendment of This Agreement. No provisions of this Agreement may be
amended, changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
amendment, change, waiver, discharge or
-5-
termination is sought, and no amendment of this Agreement shall be effective
until approved by vote of the holders of a majority of the outstanding voting
securities of the Fund and by the Board of Directors of the Fund, including a
majority of the Directors who are not interested persons of the Investment
Adviser or of the Fund, cast in person at a meeting called for the purpose of
voting on such approval.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without reference to its
conflicts of laws provisions) in a manner not in conflict with the provisions of
the 1940 Act.
13. Miscellaneous. Neither the holders of Shares of the Fund nor the
directors shall be personally liable hereunder. 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.
The Articles of Incorporation of the Fund have been filed with the State
Department of Assessments and Taxation of Maryland on October 12, 1995. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
-6-
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Fund, whereupon this letter shall become a binding contract
between the Fund and the Investment Adviser.
Yours very truly,
THE XXXXXXX FUNDS, INC.
/s/ Xxxx X. Xxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
Chief Financial Officer
Attest:
/s/ Xxxxxxx Xxxxxxx
-------------------
Name:
The foregoing Agreement is hereby accepted as of the date thereof.
XXXXXXX INVESTMENT
MANAGEMENT L.L.C.
/s/ Xxxx Xxxxxxxxxx
--------------------
Name: Xxxx Xxxxxxxxxx
Title: President
Xxxxxxx Asset Management
Attest:
/s/ Xxxxxxx Xxxxxxx
-------------------
Name:
-7-
SCHEDULE A
ANNUAL ADVISORY FEE
PORTFOLIO (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
------------------------------ ---------------------------------------------
Xxxxxxx Growth Fund 1.25%
Xxxxxxx Aggressive Growth Fund 1.25%
Xxxxxxx Small Cap Growth Fund 1.25%
-8-
