Exhibit (d)(1)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of May, 1997 by and between Xxxxxx Xxxxxxx
Institutional Fund, Inc., a Maryland corporation (the "Fund") and Xxxxxx Xxxxxxx
Asset Management Inc., a Delaware corporation (the "Adviser").
1. DUTIES OF ADVISER. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund's Active Country Allocation Portfolio, Aggressive
Equity Portfolio, Asian Equity Portfolio, Balanced Portfolio, China Growth
Portfolio, Emerging Growth Portfolio, Emerging Markets Portfolio, Emerging
Markets Debt Portfolio, Equity Growth Portfolio, European Equity Portfolio,
Fixed Income Portfolio, Global Equity Portfolio, Global Fixed Income Portfolio,
Gold Portfolio, High Yield Portfolio, International Equity Portfolio,
International Magnum Portfolio, International Small Cap Portfolio, Japanese
Equity Portfolio, Latin American Portfolio, MicroCap Portfolio, Money Market
Portfolio, Mortgage-Backed Securities Portfolio, Municipal Bond Portfolio,
Municipal Money Market Portfolio, Small Cap Value Equity Portfolio, Technology
Portfolio, U.S. Real Estate Portfolio, Value Equity Portfolio and such other
portfolios as may be offered by the Fund (collectively, 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 Fund's
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 Directors 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
Directors 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 Fund's Portfolios and is directed to use its best efforts to obtain
the best available price and most favorable execution, except as prescribed
herein. Unless and until otherwise directed by the Board of Directors 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.
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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 Directors 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 following annual
percentage rates, to each Portfolio's average daily net assets for the quarter:
Portfolio Contractual Rate of Advisory Fees
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Active Country Allocation Portfolio 0.65%
Aggressive Equity Portfolio 0.80%
Asian Equity Portfolio 0.80%
Balanced Portfolio 0.50%
China Growth Portfolio 1.25%
Emerging Growth Portfolio 1.00%
Emerging Markets Portfolio 1.25%
Emerging Markets Debt Portfolio 1.00%
Equity Growth Portfolio 0.60%
European Equity Portfolio 0.80%
Fixed Income Portfolio 0.35%
Global Equity Portfolio 0.80%
Global Fixed Income Portfolio 0.40%
Gold Portfolio 1.00%
High Yield Portfolio 0.50%
International Equity Portfolio 0.80%
International Magnum Portfolio 0.80%
International Small Cap Portfolio 0.95%
Japanese Equity Portfolio 0.80%
Latin American Portfolio 1.10%
MicroCap Portfolio 1.00%
Money Market Portfolio 0.30%
Mortgage-Backed Securities Portfolio 0.35%
Municipal Bond Portfolio 0.35%
Municipal Money Market Portfolio 0.30%
Small Cap Value Equity Portfolio 0.85%
Technology Portfolio 1.00%
U.S. Real Estate Portfolio 0.80%
Value Equity Portfolio 0.50%
In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is
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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.
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 of 1940 ("1940
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 Articles
of Incorporation of the Fund and the Certificate of Incorporation of the
Adviser, Directors, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and shareholders
of the Adviser are or may be interested in the Fund as Directors, officers,
shareholders or otherwise; and the Adviser (or any successor) is or may be
interested in the Fund as a shareholder or otherwise; and that the effect of any
such interrelationships shall be governed by said Articles of Incorporation,
Certificate of Incorporation and the provisions of the 1940 Act.
9. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of May 1, 1999 or the date of
the first annual or special meeting of the shareholders of the Fund and, if
approved by a majority of the outstanding voting securities of each Portfolio of
the Fund, thereafter shall continue for periods of one year 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 Directors of the Fund who are not
parties to this
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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
Directors 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 1940 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 Directors 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, PROVIDED that an assignment to a corporate successor to
all of substantially all of the Adviser's business or to a wholly-owned
subsidiary of such corporate successor which does not result in a change of
actual control of the Adviser's business shall not be deemed to be an assignment
for the purposes of this Agreement. 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 and shall be deemed given when received by the
addressee.
As used in this Section 9, 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 1940 Act.
10. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors 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.
11. USE OF NAME. The Fund agrees that if this Agreement is terminated and
the Adviser shall no longer be the adviser to the Fund, the Fund will, within a
reasonable period of time, change its name to delete reference to "Xxxxxx
Xxxxxxx."
12. SEVERABILITY. If any provisions 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.
13. APPLICABLE LAW. This Agreement shall be construed in accordance with
the laws of the State of New York, PROVIDED, HOWEVER, that nothing herein shall
be construed as being inconsistent with the 1940 Act.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the day and year
first written above.
XXXXXX XXXXXXX ASSET XXXXXX XXXXXXX
MANAGEMENT INC. INSTITUTIONAL FUND, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxxxx, Xx. Name: Xxxxxxx X. Xxxxx
Title: Principal, General Title: President
Counsel and Secretary
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