EXHIBIT (d)
AMENDED INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT made this 17th day of December, 1996, as amended
November 19, 2002, between Xxxxxx Investment Funds, Inc., a Maryland corporation
(the "Company"), and Xxxxxx Trust, N.A., a Minnesota corporation (the
"Advisor").
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "Act"), as an open end management investment company; and
WHEREAS, the Company is initially authorized to issue shares of Class A
Common Stock (the Growth Stock Fund) and shares of Class B Common Stock (the
Bond Fund) (each, a Fund, and collectively, the "Funds"); and
WHEREAS, the Company desires to retain the Adviser, which is an
investment adviser exempt from registration under the Investment Advisers Act of
1940, as the investment adviser for the Funds.
NOW, THEREFORE, the Company and the Adviser do mutually promise and
agree as follows:
1. Employment. The Company hereby employs the Adviser to manage the
investment and reinvestment of the assets of the Funds for the period and on the
terms set forth in this Agreement. The Adviser hereby accepts such employment
for the compensation herein provided and agrees during such period to render the
services and to assume the obligations herein set forth.
2. Authority of the Adviser. The Adviser shall supervise and manage the
investment portfolios of the Funds, and, subject to such policies as the Board
of Directors of the Company (the "Board") may determine, direct the purchase and
sale of investment securities in the day to day management of the Funds. The
Adviser shall for all purposes herein be deemed to be an independent contractor
and shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Company or the Funds in any way or otherwise be
deemed an agent of the Company or the Funds. However, one or more shareholders,
officers, directors or employees of the Adviser may serve as directors and/or
officers of the Company, but without compensation or reimbursement of expenses
for such services from the Company. Nothing contained herein shall be deemed to
require the Company to take any action contrary to its Articles of
Incorporation, as amended, restated or supplemented from time to time, or any
applicable statute or regulation, or to relieve or deprive the Board of its
responsibility for and control of the affairs of the Funds.
3. Expenses. The Adviser, at its own expense and without reimbursement
from the Company or the Funds, shall furnish office space, and all necessary
office facilities, equipment and executive personnel for managing the
investments of the Funds. The Adviser shall not be required to pay any expenses
of a Fund except as provided herein if the total expenses borne by the Fund,
including the Adviser's fee and the fees paid to the Fund's Administrator but
excluding all federal, state and local taxes, interest, brokerage commissions
and extraordinary items, in any year exceed that percentage of the average net
assets of the Fund for such year, as determined by
valuations made as of the close of each business day, which is the most
restrictive percentage provided by the state laws of the various states in which
the Fund's shares are qualified for sale. The expenses of a Fund's operations
borne by the Fund include by way of illustration and not limitation, directors
fees paid to those directors who are not officers of the Company, the costs of
preparing and printing registration statements required under the Securities Act
of 1933, as amended and the Act, the expense of registering its shares with the
Commission and in the various states, the printing and distribution cost of
prospectuses mailed to existing shareholders, the cost of stock certificates (if
any), director and officer liability insurance, reports to shareholders, reports
to government authorities and proxy statements, interest charges, taxes, legal
expenses, salaries of administrative and clerical personnel, association
membership dues, auditing and accounting services, insurance premiums, brokerage
and other expenses connected with the execution of portfolio securities
transactions, fees and expenses of the custodian of the Fund's assets, expenses
of calculating the net asset value and repurchasing and redeeming shares,
printing and mailing expenses, charges and expenses of dividend disbursing
agents, registrars and stock transfer agents and the cost of keeping all
necessary shareholder records and accounts.
The Company shall monitor the expense ratios of the Funds on a monthly
basis. If the accrued amount of the expenses of a Fund exceeds the expense
limitation established herein, the Company shall create an account receivable
from the Adviser in the amount of such excess. In such a case, the monthly
payment of the Adviser's fee will be reduced by the amount of such excess,
subject to adjustment month by month during the balance of the Company's fiscal
year if accrued expenses thereafter fall below the expense limitation.
4. Compensation of the Adviser. For the services to be rendered by the
Adviser hereunder, the Company, through and on behalf of the Funds, shall pay to
the Adviser an advisory fee, paid monthly, based on the average net assets of
the Funds, as determined by valuations made as of the close of each business day
of the month. The monthly advisory fee shall be 1/12 of 0.7% (0.7% per annum) on
the average daily net assets of the Funds. For any month in which this Agreement
is not in effect for the entire month, such fee shall be reduced proportionately
on the basis of the number of calendar days during which it is in effect and the
fee computed upon the average net asset value of the business days during which
it is so in effect.
5. Ownership of Shares of the Fund. The Adviser shall not take an
ownership position in the Funds, and shall not permit any of its shareholders,
officers, directors or employees to take a long or short position in the shares
of the Funds, except for the purchase of shares of the Funds for investment
purposes at the same price as that available to the public at the time of
purchase or in connection with the initial capitalization of the Funds.
6. Exclusivity. The services of the Adviser to the Funds hereunder are
not to be deemed exclusive and the Adviser shall be free to furnish similar
services to others as long as the services hereunder are not impaired thereby.
During the period that this Agreement is in effect, the Adviser shall be the
Funds' sole investment adviser.
7. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Adviser, the Adviser shall not be subject to liability to the Funds or to
any shareholder of the Funds for any act or omission
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in the course of, or connected with, rendering services hereunder, or for any
losses that may be sustained in the purchase, holding or sale of any security.
8. Brokerage Commissions. The Adviser, subject to the control and
direction of the Board, shall have authority and discretion to select brokers
and dealers to execute portfolio transactions for the Funds and for the
selection of the markets on or in which the transactions will be executed. The
Adviser may cause the Funds to pay a broker dealer which provides brokerage and
research services, as such services are defined in Section 28(e)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), a commission
for effecting a securities transaction in excess of the amount another broker
dealer would have charged for effecting such transaction, if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of brokerage and research services provided by the
executing broker dealer, viewed in terms of either that particular transaction
or such broker-dealer's overall responsibilities with respect to the accounts as
to which such broker-dealer exercises investment discretion (as defined in
Section 3(a)(35) of the Exchange Act). The Adviser shall provide such reports as
the Board may reasonably request with respect to the Funds' total brokerage
commissions and the manner in which that brokerage commission was allocated.
9. Code of Ethics. The Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j 1 under the Act and has provided the
Company with a copy of the code of ethics and evidence of its adoption. Upon the
written request of the Company, the Adviser shall permit the Company to examine
any reports required to be made by the Adviser pursuant to Rule 17j 1(c)(1)
under the Act.
10. Amendments. This Agreement may be amended by the mutual consent of
the parties; provided, however, that in no event may it be amended without the
approval of the Board in the manner required by the Act, and by the vote of the
majority of the outstanding voting securities of the Funds, as defined in the
Act.
11. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by the Board or by a vote of the majority of the
outstanding voting securities of the Funds, as defined in the Act, upon giving
sixty (60) days' written notice to the Adviser. This Agreement may be terminated
by the Adviser at any time upon the giving of sixty (60) days' written notice to
the Company. This Agreement shall terminate automatically in the event of its
assignment (as defined in Section 2(a)(4) of the Act). Subject to prior
termination as hereinbefore provided, this Agreement shall continue in effect
for an initial period beginning as of the date hereof and ending December 16,
1997 and indefinitely thereafter, but only so long as the continuance after such
initial period is specifically approved annually by (i) the Board or by the vote
of the majority of the outstanding voting securities of the Funds, as defined in
the Act, and (ii) the Board in the manner required by the Act, provided that any
such approval may be made effective not more than sixty (60) days thereafter.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the 19th day of November, 2002.
XXXXXX INVESTMENT FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
President
XXXXXX TRUST, N.A.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Senior Vice President and Chief
Investment Officer
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