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EXHIBIT 5(e)
HOTCHKIS AND WILEY FUNDS
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 7th day of May, 1993, and amended and restated as
of October 31, 1995, by and between HOTCHKIS AND WILEY FUNDS (the "Trust"), a
Massachusetts business trust, and HOTCHKIS AND WILEY (the "Advisor").
WITNESSETH:
Whereas, two series of the Trust having separate assets and liabilities
have been created entitled the "Low Duration Series" (hereafter the "Low
Duration Fund") and the "Short-Term Investment Series" (hereafter the "Short-
Term Investment Fund"), collectively referred to herein as the "Fixed-Income
Funds"; and
Whereas, it is desirable to have a new investment advisory agreement
(i.e., this Agreement) relating to the Fixed-Income Funds that supersedes the
former agreement and contains the new fee schedule applicable to the Low
Duration Fund, as approved by its shareholders at a meeting duly called and
held on October 13, 1995.
In consideration of the mutual promises and agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed by and between the parties hereto as follows:
1. In General
The Advisor agrees, all as more fully set forth herein, to act as
managerial investment adviser to the Trust with respect to the investment of
the assets of the Fixed-Income Funds and to supervise and arrange the purchase
and sale of securities held in the portfolios of the Fixed-Income Funds.
2. Duties and Obligations of the Advisor with respect to Investment of
Assets of the Fixed-Income Funds
(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Trustees of the
Trust, the Advisor shall:
(i) Decide what securities shall be purchased or sold by the
Trust with respect to the Fixed-Income Funds and when; and
(ii) Arrange for the purchase and sale of securities held in
the portfolio of the Fixed-Income Funds by placing purchase and
sale orders for the Trust with respect to the Fixed-Income Funds.
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(b) Any investment purchases or sales made by the Advisor shall at
all times conform to, and be in accordance with, any requirements imposed
by: (1) the provisions of the Investment Company Act of 1940 ("1940 Act")
and of any rules or regulations in force thereunder; (2) any other
applicable provisions of law; (3) the provisions of the Declaration of
Trust and By-Laws of the Trust as amended from time to time; (4) any
policies and determinations of the Board of Trustees of the Trust; and (5)
the fundamental policies of the Trust relating to the Fixed-Income Funds,
as reflected in the Trust's registration statement under the 1940 Act, or
as amended by the shareholders of the Fixed-Income Funds.
(c) The Advisor shall give the Trust the benefit of its best judgment
and effort in rendering services hereunder, but the Advisor shall not be
liable for any loss sustained by reason of the purchase, sale or retention
of any security whether or not such purchase, sale or retention shall have
been based on its own investigation and research or upon investigation and
research made by any other individual, firm or corporation, if such
purchase, sale or retention shall have been made and such other individual,
firm or corporation shall have been selected in good faith. Nothing herein
contained shall, however, be construed to protect the Advisor against any
liability to the Trust or its security holders by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its
duties, or by reason of its reckless disregard of obligations and duties
under this Agreement.
(d) Nothing in this Agreement shall prevent the Advisor or any
affiliated person (as defined in the 0000 Xxx) of the Advisor from acting
as investment advisor or manager and/or principal underwriter for any other
person, firm or corporation and shall not in any way limit or restrict the
Advisor or any such affiliated person from buying, selling or trading any
securities for its or their own accounts or the accounts of others for whom
it or they may be acting, provided, however, that the Advisor expressly
represents that it will undertake no activities which, in its judgment,
will adversely affect the performance of its obligations to the Trust under
this Agreement.
(e) It is agreed that the Advisor shall have no responsibility or
liability for the accuracy or completeness of the Trust's Registration
Statement under the 1940 Act or the Securities Act of 1933 except for
information supplied by the Advisor for inclusion therein. The Trust may
indemnify the Advisor to the full extent permitted by the Trust's
Declaration of Trust.
3. Broker-Dealer Relationships
The Advisor is responsible for decisions to buy and sell securities for the
Fixed-Income Funds, broker-dealer selection, and negotiation of brokerage
commission rates. The Advisor's primary consideration in effecting a securities
transaction will be execution at the most favorable price. In selecting a
broker-dealer to execute each particular transaction, the Advisor will take the
following into consideration: the best net price available; the reliability,
integrity and financial condition of the broker-dealer; the size of and
difficulty in executing the order; and the value of the expected contribution of
the broker-dealer to the investment performance of the
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5. Compensation of the Advisor
(a) The Trust agrees to pay the Advisor and the Advisor
agrees to accept as full compensation for all services rendered by the
Advisor hereunder, an annual management fee, payable monthly and
computed on the value of the net assets of the Low Duration Fund as of
the close of business each business day at the annual rate of .46 of 1%
of the Fund's average daily net assets and for the Short-Term
Investment Fund at the annual rates set forth below:
ADVISORY FEES
(EXPRESSED AS A PERCENTAGE)
PORTFOLIO SIZE OF AVERAGE DAILY NET ASSETS)
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Under $100,000,000 .40 of 1%
$100,000,000 to $249,999,999 .35 of 1%
$250,000,000 to $499,999,999 .30 of 1%
$500,000,000 or more .25 of 1%
(b) In the event the expenses of either of the Fixed-Income
Funds (including the fees of the Advisor and amortization of
organization expenses but excluding interest, taxes, brokerage
commissions, extraordinary expenses and sales charges and any
distribution fees) for any fiscal year exceed the limits set by
applicable regulations of state securities commissions, the Advisor will
reduce its fee by the amount of such excess. Any such reductions are
subject to readjustment during the year. The payment of the management
fee at the end of any month will be reduced or postponed or, if
necessary, a refund will be made to the Trust as to each of the
Fixed-Income Funds so that at no time will there be any accrued but
unpaid liability under this expense limitation.
6. Duration and Termination
(a) This Agreement as amended and restated shall go into
effect on October 31, 1995 and shall, unless terminated as hereinafter
provided, continue in effect until October 31, 1997, and thereafter
from year to year, but only so long as such continuance is specifically
approved at least annually by the Trust's Board of Trustees, including
the vote of a majority of the Trustees 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, or by the vote of the holders of a "majority" (as so
defined) of the outstanding voting securities of the Fixed-Income Funds
and by such a vote of the Trustees.
(b) This Agreement may be terminated by the Advisor at any
time without penalty upon giving the Trust sixty (60) days' written
notice (which notice may be waived by the Trust) and may be terminated
by the Trust at any time without penalty upon giving the Advisor sixty
(60) days' written notice (which notice may be waived by the Advisor),
provided that such termination by the Trust shall be directed or
approved by the vote of a majority of all of its Trustees in office at
the time or by the vote of the holders of a
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majority (as defined in the 0000 Xxx) of the voting securities of the
Trust at the time outstanding and entitled to vote. This Agreement shall
automatically terminate in the event of its assignment (as so defined).
7. Agreement Binding Only on Fund Property
The Advisor understands that the obligations of this Agreement are not
binding upon any shareholder of the Trust personally, but bind only the Trust's
property; the Advisor represents that it has notice of the provisions of the
Trust's Declaration of Trust disclaiming shareholder liability for acts or
obligations of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by duly authorized persons and their seals to be
hereunto affixed, all as of the day and year above written.
HOTCHKIS AND WILEY FUNDS
By /s/ Xxxxx X. Xxxxxx
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President
ATTEST:
/s/ Xxxxxx Xxxxxxxx
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HOTCHKIS AND WILEY
By Xxxxxx Xxxxx
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ATTEST:
/s/ Xxxxx Xxxxxx
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