EXHIBIT 99.(D)(3)
Amended and Restated Master
INVESTMENT ADVISORY CONTRACT
HSBC Investor Funds
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
December 31, 1999
Xxxxxxx and restated
March 1, 2001
HSBC Asset Management (Americas) Inc.
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
This will confirm the agreement between the undersigned HSBC Investor
Funds (the "Trust") and HSBC Asset Management (Americas) Inc. (the "Adviser") as
follows:
1. The Trust is an open-end investment company organized as a
Massachusetts business trust and consists of one or more separate investment
portfolios (the "Funds") as may be established and designated by the Trust's
Board of Trustees (the "Board of Trustees") from time to time. This Contract
shall pertain to such Funds as shall be designated in Supplements to this
Contract as further agreed between the Trust and the Adviser (the "Covered
Funds"). A separate series of shares of beneficial interest in the Trust are
offered to investors with respect to each Fund. The Trust engages in the
business of investing and reinvesting the assets of each Fund in the manner and
in accordance with the investment objectives and restrictions specified in the
currently effective prospectus (the "Prospectus") relating to the Trust and the
Funds included in the Trust's registration statement, as amended from time to
time (the "Registration Statement"), filed by the Trust under the Investment
Company Act of 1940 (the "1940 Act") and the Securities Act of 1933. Copies of
the documents referred to in the preceding sentence have been furnished to the
Adviser. Any amendments to those documents shall be furnished to the Adviser
promptly. Pursuant to a Distribution Agreement, as supplemented, and an
Administration Agreement, as supplemented, between the Trust and BISYS Fund
Services (the "Sponsor"), the Trust has employed the Sponsor to act as principal
underwriter for each Fund and to provide to the Trust management and other
services.
2. The Trust hereby appoints the Adviser to provide the investment
advisory services specified in this Contract and the Adviser hereby accepts such
appointment. The Trust expressly authorizes the Adviser, subject to the approval
of the Board of Trustees and compliance with applicable law, to employ (without
obtaining the approval of Trust's shareholders) one or more sub-advisers to
provide all or any portion of the services contemplated
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hereby, subject to supervision and oversight of the Adviser, on such terms and
conditions as the Adviser determines appropriate.
3. (a) The Adviser shall, at its expense, (i) employ or associate with
itself such persons as it believes appropriate to assist it in performing its
obligations under this Contract and (ii) provide all services, equipment and
facilities necessary to perform its obligations under this Contract.
(b) The Trust shall be responsible for all of its expenses and
liabilities, including compensation of its Trustees who are not affiliated with
the Sponsor or any of its affiliates; taxes and governmental fees; interest
charges; fees and expenses of the Trust's independent accountants and legal
counsel; trade association membership dues; fees and expenses of any custodian
(including maintenance of books and accounts and calculation of the net asset
value of shares of the Funds), transfer agent, registrar and dividend disbursing
agent of the Trust; expenses of issuing, selling, redeeming, registering and
qualifying for sale shares of beneficial interest in the Trust; expenses of
preparing and printing share certificates, prospectuses and reports to
shareholders, notices, proxy statements and reports to regulatory agencies; the
cost of office supplies, including stationery; travel expenses of all officers,
Trustees and employees; insurance premiums; brokerage and other expenses of
executing portfolio transactions; expenses of shareholders' meetings;
organization expenses; and extraordinary expenses.
4. (a) The Adviser shall provide to the Trust investment guidance and
policy direction in connection with the management of the portfolio of each
Covered Fund, including oral and written research, analysis, advice, statistical
and economic data and information and judgments of both a macroeconomic and
microeconomic character.
The Adviser will determine the securities to be purchased or sold by
each Covered Fund and will place orders pursuant to its determinations either
directly with the issuer or with any broker or dealer who deals in such
securities. The Adviser will determine what portion of each Covered Fund's
portfolio shall be invested in securities described by the policies of such
Covered Fund and what portion, if any, should be invested otherwise or held
uninvested.
The Trust will have the benefit of the investment analysis and
research, the review of current economic conditions and trends and the
consideration of long-range investment policy generally available to investment
advisory customers of the Adviser. It is understood that the Adviser will not
use any inside information pertinent to investment decisions undertaken in
connection with this Contract that may be in its possession or in the possession
of any of its affiliates nor will the Adviser seek to obtain any such
information.
(b) The Adviser also shall provide to the Trust's officers
administrative assistance in connection with the operation of the Trust and each
of the Covered Funds, which shall include (i) compliance with all reasonable
requests of the Trust for information, including information required in
connection with the Trust's filings with the Securities and Exchange
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Commission and state securities commissions and (ii) such other services as the
Adviser shall from time to time determine, upon consultation with the Sponsor,
to be necessary or useful to the administration of the Trust and each of the
Covered Funds.
(c) As manager of the assets of each Covered Fund, the Adviser
shall make investments for the account of that Fund in accordance with the
Adviser's best judgment and within the investment objectives and restrictions
set forth in the Prospectus, the 1940 Act and the provisions of the Internal
Revenue Code of 1986 relating to regulated investment companies subject to
policy decisions adopted by the Board of Trustees.
(d) The Adviser shall furnish to the Board of Trustees
periodic reports on the investment performance of each Covered Fund and on the
performance of its obligations under this Contract and shall supply such
additional reports and information as the Trust's officers or Board of Trustees
shall reasonably request.
(e) On occasions when the Adviser deems the purchase or sale
of a security to be in the best interest of a Covered Fund as well as other
customers, the Adviser, to the extent permitted by applicable law, may aggregate
the securities to be so sold or purchased in order to obtain the best execution
or lower brokerage commissions, if any. The Adviser may also on occasions
purchase or sell a particular security for one or more customers in different
amounts. On either occasion, and to the extent permitted by applicable law and
regulations, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to that Fund and to such other customers.
5. The Adviser shall give the Trust the benefit of the Adviser's best
judgment and efforts in rendering services under this Contract. As an inducement
to the Adviser's undertaking to render these services, the Trust agrees that the
Adviser shall not be liable under this Contract for any mistake in judgment or
in any other event whatsoever provided that nothing in this Contract shall be
deemed to protect or purport to protect the Adviser against any liability to the
Trust or its shareholders to which the Adviser would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of the Adviser's duties under this Contract or by reason of the Adviser's
reckless disregard of its obligations and duties hereunder.
6. In consideration of the services to be rendered by the Adviser under
this Contract, each Covered Fund shall pay the Adviser 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 that Fund during the
preceding month, at annual rates set forth in a Supplement to this Contract with
respect to that Fund. If the fees payable to the Adviser pursuant to this
paragraph 6 begin to accrue before the end of any month or if this Contract
terminates before the end of any month, the fees for the period from that date
to the end of that month or from the beginning of that month to the date of
termination, as the case may be, shall be prorated according to the proportion
which the period bears to the full month in which the effectiveness or
termination occurs. For purposes of
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calculating the monthly fees, the value of the net assets of each Covered Fund
shall be computed in the manner specified in the Prospectus for the computation
of net asset value. For purposes of this Contract, a "business day" is any day
the New York Stock Exchange is open for trading.
7. If the aggregate expenses of every character incurred by, or
allocated to, each Covered Fund in any fiscal year, other than interest, taxes,
expenses under the Distribution Agreement and the Amended and Restated Master
Distribution Plan and Supplements, brokerage commissions and other portfolio
transaction expenses, other expenditures which are capitalized in accordance
with generally accepted accounting principles and any extraordinary expense
(including, without limitation, litigation and indemnification expense), but
including the fees payable under this Contract and the fees payable to the
Sponsor under the Distribution Agreement and the Amended and Restated Master
Distribution Plan and Supplements ("includible expenses"), shall exceed any
applicable expense limitations, the Adviser shall pay that Fund an amount equal
to 50% of that excess. With respect to portions of a fiscal year in which this
Contract shall be in effect, the foregoing limitations shall be prorated
according to the proportion which that portion of the fiscal year bears to the
full fiscal year. At the end of each month of the Trust's fiscal year, the
Sponsor will review the includible expenses accrued during that fiscal year to
the end of the period and shall estimate the contemplated includible expenses
for the balance of that fiscal year. If, as a result of that review and
estimation, it appears likely that the includible expenses will exceed the
limitations referred to in this paragraph 7 for a fiscal year with respect to a
Covered Fund, the monthly fees relating to that Fund payable to the Adviser
under this Contract for such month shall be reduced, subject to a later
reimbursement to reflect actual expenses, by an amount equal to 50% of a pro
rata portion (prorated on the basis of the remaining months of the fiscal year,
including the month just ended) of the amount by which the includible expenses
for the fiscal year (less an amount equal to the aggregate of actual reductions
made pursuant to this provision with respect to prior months of the fiscal year)
are expected to exceed the limitations provided in this paragraph 7. For
purposes of the foregoing, the value of the net assets of each Covered Fund
shall be computed in the manner specified in paragraph 6, and any payments
required to be made by the Adviser shall be made once a year promptly after the
end of the Trust's fiscal year.
8. (a) This Contract and any Supplement hereto shall become effective
with respect to a Covered Fund on the date specified in such Supplement and
shall thereafter continue in effect with respect to that Fund for a period of
more than two years from such date only so long as the continuance is
specifically approved at least annually (i) by the vote of a majority of the
outstanding voting securities of the Fund (as defined in the 1940 Act) or by the
Board of Trustees and (ii) by the vote, cast in person at a meeting called for
that purpose, of a majority of the members of the Board of Trustees who are not
parties to this Contract or "interested persons" (as defined in the 1940 Act) of
any such party.
(b) This Contract and any Supplement hereto may be terminated
with respect to a Covered Fund at any time, without the payment of any penalty,
by a vote of a majority of the outstanding voting securities of that Fund (as
defined in the 1940 Act) or by a vote of a majority of the entire Board of
Trustees on 60 days' written notice to the Adviser or by the Adviser on 60
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days' written notice to the Trust. This Contract shall terminate automatically
in the event of its assignment (as defined in the 1940 Act).
9. Except to the extent necessary to perform the Adviser's obligations
under this Contract, nothing herein shall be deemed to limit or restrict the
right of the Adviser, or any affiliate of the Adviser, or any employee of the
Adviser, to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association.
10. The investment management services of the Adviser to the Trust
under this Contract are not to be deemed exclusive as to the Adviser and the
Adviser will be free to render similar services to others.
11. This Contract shall be construed in accordance with the laws of the
State of New York provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act.
12. In the event that the Board of Trustees shall establish one or more
additional investment portfolios, it shall so notify the Adviser in writing. If
the Adviser wishes to render investment advisory services to such portfolio, it
shall so notify the Trust in writing, whereupon such portfolio shall become a
Covered Fund hereunder.
13. The Declaration of Trust establishing the Trust, together with all
amendments thereto (the "Declaration"), a copy of which is on file in the Office
of the Secretary of the Commonwealth of Massachusetts, provides that the name of
the Trust refers to the Trustees under the Declaration collectively as Trustees
and not as individuals or personally, and that no shareholder, Trustee, officer,
employee or agent of the Trust shall be subject to claims against or obligations
of the Trust to any extent whatsoever, but that the Trust estate only shall be
liable.
If the foregoing correctly sets forth the agreement between the Trust
and the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
HSBC INVESTOR FUNDS
By _______________________________
Name:
Title:
ACCEPTED:
HSBC ASSET MANAGEMENT (AMERICAS) INC.
By ____________________________________
Title:
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