FORM OF AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT, entered into as of the____ day of ________,
1999, by and between THE NOTTINGHAM INVESTMENT TRUST II (the "Trust"), a
Massachusetts business trust, and XXXXX CAPITAL MANAGEMENT, INC., a Maryland
corporation (the "Advisor"), registered as an investment advisor under the
Investment Advisors Act of 1940, as amended (the "Advisors Act").
WHEREAS, the Trust is registered as a diversified, open-end management
investment company of the series type under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Advisor to furnish investment advisory
and administrative services to each series of the Trust set forth in Exhibit A
(each a "Fund," collectively the "Funds"), as amended from time to time, and the
Advisor is willing to so furnish such services;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Advisor to act as Investment
Advisor to each Fund for the period and on the terms set forth in this
Agreement. The Advisor accepts such appointment and agrees to furnish
the services herein set forth, for the compensation herein provided.
2. Delivery of Documents. The Trust will furnish the Advisor with copies
properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State of
Massachusetts (such Declaration, as presently in effect and as
it shall from time to time be amended, is herein called the
"Declaration");
(b) The Trust's By-Laws (such By-Laws, as presently in effect and
as they shall from time to time be amended, are herein called
the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Advisor and approving this Agreement;
(d) The Trust' Registration Statement on Form N-1A under the 1940
Act and under the Securities Act of 1933 as amended, (the
"1933 Act"), relating to shares of beneficial interest of each
Fund (herein called the "Shares") as filed with the Securities
and Exchange Commission ("SEC") and all amendments thereto;
(e) The Funds' Prospectus (such Prospectus, as presently in effect
and all amendment and supplements thereto are herein called
the "Prospectus").
The Trust will furnish the Advisor from time to time with copies,
properly certified or authenticated, of all amendments of or
supplements to the foregoing at the same time as such documents are
required to be filed with the SEC.
3. Management. Subject to the supervision of the Trust's Board of
Trustees, the Advisor will provide a continuous investment program for
each Fund, including investment research and management with respect to
all securities, investments, cash and cash equivalents in each Fund.
The Advisor will determine from time to time what securities and other
investments will be purchased, retained or sold by each Fund. The
Advisor will provide the services under this Agreement in accordance
with the Fund's investment objectives, policies and restrictions as
stated in the Prospectus. The Advisor further agrees that it:
(a) Will conform its activities to all applicable Rules and
Regulations of the Securities and Exchange Commission and
will, in addition, conduct its activities under this Agreement
in accordance with regulations or any other Federal or State
agencies which may now or in the future have jurisdiction over
its activities under this Agreement.
(b) Will place orders pursuant to its investment determination for
each Fund either directly with the issuer or with any broker
or dealer. In placing orders with brokers or dealers, the
Advisor will attempt to obtain the best net price and the most
favorable execution of its orders. Consistent with this
obligation, when the Advisor believes two or more brokers or
dealers are comparable in price and execution, the Advisor may
prefer: (i) brokers or dealers who provide research advice and
other services for each Fund, or who recommend or sell shares
of each Fund, and (ii) brokers who are affiliated with the
Trust or its Advisor(s), provided, however, that in no
instance will portfolio securities be purchased from or sold
to the Advisor or any affiliated person of the Advisor in
principal transactions;
(c) Will provide certain executive personnel for the Trust as may
be mutually agreed upon from time to time with the Board of
Trustees, the salaries and expenses of such personnel to be
borne by the Advisor unless otherwise mutually agreed upon;
and
(d) Will provide, at its own cost, all office space, facilities
and equipment necessary for the conduct of its advisory
activities on behalf of each Fund.
4. Services Not Exclusive. The advisory services furnished by the Advisor
hereunder are not to be deemed exclusive, and the Advisor shall be free
to furnish similar services to others so long as its services under
this Agreement are not impaired thereby provided, however, that without
the written consent of the Trustees, the Advisor will not serve as
investment Advisor to any other investment company having a similar
investment object to that of each Fund.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Advisor hereby agrees that all records which it
maintains for the benefit of the Trust are the property of the Trust
and further agrees to surrender promptly to the Trust any of such
records upon the Fund's request. The Advisor further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by it pursuant to Rule 31a-1 under the Act
that are not maintained by others on behalf of the Trust.
6. Expenses. During the term of this Agreement, the Advisor will pay all
expenses incurred by it in connection with its investment advisory
services pertaining to each Fund. In the event that there is no
distribution plan under Rule 12b-1 of the 1940 Act in effect for a
particular Fund, the Advisor will pay, out of the Advisor's resources
generated from sources other than fees received from the Trust, the
entire cost of the promotion and sale of that Fund's shares.
Notwithstanding the foregoing, the Trust shall pay the expenses and
costs of the following (as they pertain to the Funds):
(a) Taxes, interest charges and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio transaction
of each Fund;
(c) Fees and expenses of the custodian of each Fund's portfolio
securities;
(d) Fees and expenses of the Trust's administrator, transfer and
dividend disbursing agent and the Trust's fund accounting agent or,
if the Trust performs any such services without an agent, the costs
of the same;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Trust's existence as a legal entity;
(g) Compensation of trustees who are not interested persons of the
Advisor as that term is defined by law;
(h) Costs of Trust meetings;
(i) Federal and State registration or qualification fees and expenses;
(j) Costs of setting in type, printing and mailing Prospectuses,
reports and notices to existing shareholders;
(k) The investment advisory fee payable to the Advisor, as provided in
paragraph 7 herein; and
(l) Plan of Distribution expenses, but only in accordance with the Plan
of Distribution as approved by the shareholders of each Fund.
It is understood that the Trust may desire to register each Fund's
shares for sale in certain states which impose expense limitations on
mutual funds. The Trust agrees that it will register each Fund's shares
in such states only with the prior written consent of the Advisor.
7. Compensation. The Trust will pay the Advisor and the Advisor will
accept as full compensation an investment advisory fee, based upon the
average daily net assets of each Fund, computed at the end of each
month and payable within five (5) business days thereafter, based upon
the schedule attached hereto as Exhibit A.
8(a) Limitation of Liability. The Advisor shall not be liable for any error
of judgment, mistake of law or for any other loss whatsoever suffered
by the Trust in connection with the performance of this Agreement,
except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the
Advisor in the performance of its duties or from reckless disregard by
it of its obligations and duties under this Agreement.
8(b) Indemnification of Advisor. Subject to the limitations set forth in
this Subsection 8(b), the Trust shall indemnify, defend and hold
harmless (from the assets of the Trust or Trusts to which the conduct
in question relates) the Advisor against all loss, damage and
liability, including reasonable accountants' and counsel fees, incurred
by the Advisor in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, related to or resulting
from this Agreement or the performance of services hereunder, except
with respect to any matter as to which it has been determined that the
loss, damage or liability is a direct result of (i) a breach of
fiduciary duty with respect to the receipt of compensation for
services, or (ii) willful misfeasance, bad faith or gross negligence on
the part of the Advisor in the performance of its duties or from
reckless disregard by it of its duties under this Agreement (either and
both of the conduct described in clauses (i) and (ii) above being
referred to hereinafter as "Disabling Conduct"). A determination that
the Advisor is entitled to indemnification may be made by (i) a final
decision on the merits by a court or other body before whom the
proceeding was brought that the Advisor was not liable by reason of
Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against the Advisor for insufficiency of
evidence of Disabling Conduct, or (iii) a reasonable determination,
based upon a review of the facts, that the Advisor was not liable by
reason of Disabling Conduct by, (a) vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as the
quoted phrase is defined in Section 2(a)(19) of the 1940 Act nor
parties to the action, suit or other proceeding on the same or similar
grounds that is then or has been pending or threatened (such quorum of
such Trustees being referred to hereinafter as the "Independent
Trustees"), or (b) an independent legal counsel in a written opinion.
Expenses, including accountants' and counsel fees so incurred by the
Advisor (but excluding amounts paid in satisfaction of judgment, in
compromise or as fines or penalties), may be paid from time to time by
the Fund or Funds to which the conduct in question related in advance
of the final disposition of any action, suit or proceeding; provided,
that the Advisor shall have undertaken to repay the amounts so paid if
it is ultimately determined that indemnification of such expenses is
not authorized under this Subsection 8(b) and if (i) the Advisor shall
have provided security for such undertaking, (ii) the Trust shall be
insured against losses arising by reason of any lawful advances, or
(iii) a majority of the Independent Trustees, or an independent legal
counsel in a written opinion, shall have determined, based on a review
of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the Advisor ultimately will be
entitled to indemnification hereunder.
As to any matter disposed of by a compromise payment by the Advisor
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any
other expenses shall be provided unless such indemnification shall be
approved (i) by a majority of the Independent Trustees or (ii) by an
independent legal counsel in a written opinion. Approval by the
Independent Trustees pursuant to clause (i) shall not prevent the
recovery from the Advisor of any amount paid to the Advisor in
accordance with either of such clauses as indemnification of the
Advisor is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief
that the Advisor's action was in or not opposed to the best interests
of the Funds or to have been liable to the Funds or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in its conduct under the Agreement.
The right of indemnification provided by this Subsection 8(b) shall not
be exclusive of or affect any of the rights to which the Advisor may be
entitled. Nothing contained in this Subsection 8(b) shall affect any
rights to indemnification to which Trustees, officers or other
personnel of the Trust, and other persons may be entitled by contract
or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Advisor is
entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for
that purpose.
8(c) The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and
protect the Advisor and its directors, officers, employees and agents
and shall inure to the benefit of its/their respective successors,
assigns and personal representatives.
9. Duration and Termination. With respect to any new series of the Trust
that is advised by the Advisor, this Agreement shall continue in effect
for an initial two year period from the date such new series is added
to this Agreement, as set forth in Exhibit A, unless sooner terminated
as provided herein. Unless terminated as herein provided, this
Agreement shall continue in effect, with respect to each Fund (after
its initial two year term), for successive periods of one year each,
provided such continuance is specifically approved annually:
a. By the vote of a majority of those members of the Board of
Trustees who are not parties to this Agreement or interested
persons of any such party (as that term is defined in the 1940
Act), cast in person at a meeting called for the purpose of
voting on such approval; and
b. By vote of either the Board or a majority (as that term is
defined in the 0000 Xxx) of the outstanding voting securities
of each Fund.
Notwithstanding the foregoing, this Agreement may be terminated, with
respect to any series, by The Trust or by the Advisor at any time on
sixty (60) days' written notice, without the payment of any penalty,
provided that termination by The Trust must be authorized either by
vote of the Board of Trustees or by vote of a majority of the
outstanding voting securities of each Fund. This Agreement will
automatically terminate in the event of its assignment (as that term is
defined in the 1940 Act).
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by a written
instrument signed by the party against which enforcement of the change,
waiver, discharge or termination is sought. No material amendment of
this Agreement shall be effective as to any Fund until approved by vote
of the holders of a majority of that Fund's outstanding voting
securities (as defined in the 1940 Act).
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby. This Agreement shall be
binding and shall inure to the benefit of the parties hereto and their
respective successors.
12. Applicable Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: THE NOTTINGHAM INVESTMENT TRUST II
By: __________________________ By: __________________________
Title: _______________________ Title: _______________________
ATTEST: XXXXX CAPITAL MANAGEMENT, INC.
By: __________________________ By: __________________________
Title: _______________________ Title: _______________________
EXHIBIT A
to the
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISOR'S COMPENSATION SCHEDULE
For the services set forth in the AMENDED AND RESTATED INVESTMENT ADVISORY
AGREEMENT, the Investment Advisor shall be compensated monthly, as of the last
day of each month, within five business days of the month end, a fee based upon
average daily net assets according to the following schedule.
The Xxxxx Capital Management Equity Fund
Date added to this Agreement - December 10, 1992
Net Assets Annual Fee
---------- ----------
On the first $25 million 0.65%
On all assets over 25 million 0.50%
The Xxxxx Capital Management Balanced Fund
Date added to this Agreement - December 10, 1992
Net Assets Annual Fee
---------- ----------
On the first $25 million 0.65%
On all assets over 25 million 0.50%
The Xxxxx Capital Management Small Company Fund
Date added to this Agreement - December 10, 1992
Net Assets Annual Fee
---------- ----------
On all assets 1.00%
The Xxxxx Capital Management International Equity Fund
Date added to this Agreement - [ ], 1999
Net Assets Annual Fee
---------- ----------
On all assets 1.00%
