XXXX XXXXXXX U.S. GLOBAL LEADERS FUND (a series of Xxxx Xxxxxxx Investment Trust
III) 000 Xxxxxxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000 March 1, 2001 Xxxx
Xxxxxxx Advisers, Inc. 000 Xxxxxxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Investment Management Contract ---------------------------------------- Ladies
and Gentlemen: Xxxx Xxxxxxx Investment Trust III (the "Trust"), of which Xxxx
Xxxxxxx U.S. Global Leaders Fund (the "Fund") is a series, has been organized as
a business trust under the laws of The Commonwealth of Massachusetts to engage
in the business of an investment company. The Trust's shares of beneficial
interest, no par value, may be divided into series, each series representing the
entire undivided interest in a separate portfolio of assets. This Agreement
relates solely to the Fund. The Board of Trustees of the Trust (the "Trustees")
has selected Xxxx Xxxxxxx Advisers, Inc. (the "Adviser") to provide overall
investment advice and management for the Fund, and to provide certain other
services, as more fully set forth below, and the Adviser is willing to provide
such advice, management and services under the terms and conditions hereinafter
set forth. Accordingly, the Adviser and the Trust, on behalf of the Fund, agree
as follows: 1. DELIVERY OF DOCUMENTS. The Trust has furnished the Adviser with
copies, properly certified or otherwise authenticated, of each of the following:
(a) Amended and Restated Declaration of Trust dated July 1, 1996, as amended
from time to time (the "Declaration of Trust"); (b) By-Laws of the Trust as in
effect on the date hereof; (c) Resolutions of the Trustees selecting the Adviser
as investment adviser for the Fund and approving the form of this Agreement; (d)
The Trust's Code of Ethics. The Trust will furnish to the Adviser from time to
time copies, properly certified or otherwise authenticated, of all amendments of
or supplements to the foregoing, if any. 2. INVESTMENT AND MANAGEMENT SERVICES.
The Adviser will use its best efforts to provide to the Fund continuing and
suitable investment programs with respect to investments, consistent with the
investment objectives, policies and restrictions of the Fund. In the performance
of the Adviser's duties hereunder, subject always (x) to the provisions
contained in the documents delivered to the Adviser pursuant to Section 1, as
each of the same may from time to time be amended or supplemented, and (y) to
the limitations set forth in the Fund's then-current Prospectus and Statement of
Additional Information included in the registration statement of the Trust as in
effect from time to time under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended (the "1940 Act"), the Adviser will,
at its own expense: (a) furnish the Fund with advice and recommendations,
consistent with the investment objectives, policies and restrictions of the
Fund, with respect to the purchase, holding and disposition of portfolio
securities, alone or in consultation with any subadviser or subadvisers
appointed pursuant to this Agreement and subject to the provisions of any
sub-investment management contract respecting the responsibilities of such
subadviser or subadvisers; (b) advise the Fund in connection with policy
decisions to be made by the Trustees or any committee thereof with respect to
the Fund's investments and, as requested, furnish the Fund with research,
economic and statistical data in connection with the Fund's investments and
investment policies; (c) provide administration of the day-to-day investment
operations of the Fund; (d) submit such reports relating to the valuation of the
Fund's securities as the Trustees may reasonably request; (e) assist the Fund in
any negotiations relating to the Fund's investments with issuers, investment
banking firms, securities brokers or dealers and other institutions or
investors; (f) consistent with the provisions of Section 7 of this Agreement,
place orders for the purchase, sale or exchange of portfolio securities with
brokers or dealers selected by the Adviser, PROVIDED that in connection with the
placing of such orders and the selection of such brokers or dealers the Adviser
shall seek to obtain execution and pricing within the policy guidelines
determined by the Trustees and set forth in the Prospectus and Statement of
Additional Information of the Fund as in effect from time to time; (g) provide
office space and office equipment and supplies, the use of accounting equipment
when required, and necessary executive, clerical and secretarial personnel for
the administration of the affairs of the Fund; (h) from time to time or at any
time requested by the Trustees, make reports to the Fund of the Adviser's
performance of the foregoing services and furnish advice and recommendations
with respect to other aspects of the business and affairs of the Fund; (i)
maintain all books and records with respect to the Fund's securities
transactions required by the 1940 Act, including subparagraphs (b)(5), (6), (9)
and (10) and paragraph (f) of Rule 31a-1 thereunder (other than those records
being maintained by the Fund's custodian or transfer agent) and preserve such
records for the periods prescribed therefor by Rule 31a-2 of the 1940 Act (the
Adviser agrees that such records are the property of the Fund and will be
surrendered to the Fund promptly upon request therefor); (j) obtain and evaluate
such information relating to economies, industries, businesses, securities
markets and securities as the Adviser may deem necessary or useful in the
discharge of the Adviser's duties hereunder; (k) oversee, and use the Adviser's
best efforts to assure the performance of the activities and services of the
custodian, transfer agent or other similar agents retained by the Fund; (l) give
instructions to the Fund's custodian as to deliveries of securities to and from
such custodian and transfer of payment of cash for the account of the Fund; and
(m) appoint and employ one or more sub-advisors satisfactory to the Fund under
sub-investment management agreements. 3. EXPENSES PAID BY THE ADVISER. The
Adviser will pay: (a) the compensation and expenses of all officers and
employees of the Trust; (b) the expenses of office rent, telephone and other
utilities, office furniture, equipment, supplies and other expenses of the Fund;
and (c) any other expenses incurred by the Adviser in connection with the
performance of its duties hereunder. 4. EXPENSES OF THE FUND NOT PAID BY THE
ADVISER. The Adviser will not be required to pay any expenses which this
Agreement does not expressly make payable by it. In particular, and without
limiting the generality of the foregoing but subject to the provisions of
Section 3, the Adviser will not be required to pay under this Agreement: (a) any
and all expenses, taxes and governmental fees incurred by the Trust or the Fund
prior to the effective date of this Agreement; (b) without limiting the
generality of the foregoing clause (a), the expenses of organizing the Trust and
the Fund (including without limitation, legal, accounting and auditing fees and
expenses incurred in connection with the matters referred to in this clause (b),
of initially registering shares of the Trust under the Securities Act of 1933,
as amended, and of qualifying the shares for sale under state securities laws
for the initial offering and sale of shares; (c) the compensation and expenses
of Trustees who are not interested persons (as used in this Agreement, such term
shall have the meaning specified in the 0000 Xxx) of the Adviser and of
independent advisers, independent contractors, consultants, managers and other
unaffiliated agents employed by the Fund other than through the Adviser; (d)
legal, accounting, financial management, tax and auditing fees and expenses of
the Fund (including an allocable portion of the cost of its employees rendering
such services to the Fund); (e) the fees and disbursements of custodians and
depositories of the Fund's assets, transfer agents, disbursing agents, plan
agents and registrars; (f) taxes and governmental fees assessed against the
Fund's assets and payable by the Fund; (g) the cost of preparing and mailing
dividends, distributions, reports, notices and proxy materials to shareholders
of the Fund; (h) brokers' commissions and underwriting fees; (i) the expense of
periodic calculations of the net asset value of the shares of the Fund; and (j)
insurance premiums on fidelity, errors and omissions and other coverages. 5.
COMPENSATION OF THE ADVISER. For all services to be rendered, facilities
furnished and expenses paid or assumed by the Adviser as herein provided, the
Adviser shall be entitled to a fee, paid monthly in arrears, at an annual rate
equal to (i) 0.75% of the average daily net asset value of the Fund up to
$750,000,000 of average daily net assets, (ii) 0.70% of the next $2,250,000,000
of the average daily net asset value of the Fund, and (iii) 0.65% of the average
daily net asset value of the Fund in excess of $3,000,000,000. The "average
daily net assets" of the Fund shall be determined on the basis set forth in the
Fund's Prospectus or otherwise consistent with the 1940 Act and the regulations
promulgated thereunder. The Adviser will receive a pro rata portion of such
monthly fee for any periods in which the Adviser serves as investment adviser to
the Fund for less than a full month. On any day that the net asset value
calculation is suspended as specified in the Fund's Prospectus, the net asset
value for purposes of calculating the advisory fee shall be calculated as of the
date last determined. In addition, the Adviser may agree not to impose all or a
portion of its fee (in advance of the time its fee would otherwise accrue)
and/or undertake to make any other payments or arrangements necessary to limit
the Fund's expenses to any level the Adviser may specify. Any fee reduction or
undertaking shall constitute a binding modification of this Agreement while it
is in effect but may be discontinued or modified prospectively by the Adviser at
any time. 6. OTHER ACTIVITIES OF THE ADVISER AND ITS AFFILIATES. Nothing herein
contained shall prevent the Adviser or any affiliate or associate of the Adviser
from engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity, whether or not having
investment policies or portfolios similar to the Fund's; and it is specifically
understood that officers, directors and employees of the Adviser and those of
its parent company, Xxxx Xxxxxxx Life Insurance Company, or other affiliates may
continue to engage in providing portfolio management services and advice to
other investment companies, whether or not registered, to other investment
advisory clients of the Adviser or of its affiliates and to said affiliates
themselves. The Adviser shall have no obligation to acquire with respect to the
Fund a position in any investment which the Adviser, its officers, affiliates or
employees may acquire for its or their own accounts or for the account of
another client, if, in the sole discretion of the Adviser, it is not feasible or
desirable to acquire a position in such investment on behalf of the Fund.
Nothing herein contained shall prevent the Adviser from purchasing or
recommending the purchase of a particular security for one or more funds or
clients while other funds or clients may be selling the same security. 7.
AVOIDANCE OF INCONSISTENT POSITION. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Adviser nor any of
its investment management subsidiaries, nor any of the Adviser's or such
investment management subsidiaries' directors, officers or employees will act as
principal or agent or receive any commission, except as may be permitted by the
1940 Act and rules and regulations promulgated thereunder. If any occasions
shall arise in which the Adviser advises persons concerning the shares of the
Fund, the Adviser will act solely on its own behalf and not in any way on behalf
of the Fund. Nothing herein contained shall limit or restrict the Adviser or any
of its officers, affiliates or employees from buying, selling or trading in any
securities for its or their own account or accounts. 8. NO PARTNERSHIP OR JOINT
VENTURE. Neither the Trust, the Fund nor the Adviser are partners of or joint
venturers with each other and nothing herein shall be construed so as to make
them such partners or joint venturers or impose any liability as such on any of
them. 9. NAME OF THE TRUST AND THE FUND. The Trust and the Fund may use the name
"Xxxx Xxxxxxx" or any name or names derived from or similar to the names "Xxxx
Xxxxxxx Advisers, Inc.", "Xxxx Xxxxxxx Life Insurance Company", or "Xxxx Xxxxxxx
Financial Services, Inc." only for so long as this Agreement remains in effect.
At such time as this Agreement shall no longer be in effect, the Trust and the
Fund will (to the extent that they lawfully can) cease to use such a name or any
other name indicating that the Fund is advised by or otherwise connected with
the Adviser. The Fund acknowledges that it has adopted the name Xxxx Xxxxxxx
U.S. Global Leaders Fund through permission of Xxxx Xxxxxxx Life Insurance
Company, a Massachusetts insurance company, and agrees that Xxxx Xxxxxxx Life
Insurance Company reserves to itself and any successor to its business the right
to grant the nonexclusive right to use the name "Xxxx Xxxxxxx" or any similar
name or names to any other corporation or entity, including but not limited to
any investment company of which Xxxx Xxxxxxx Life Insurance Company or any
subsidiary or affiliate thereof shall be the investment adviser. 10. LIMITATION
OF LIABILITY OF THE ADVISER. The Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the Adviser in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Any person, even though also
employed by the Adviser, who may be or become an employee of and paid by the
Trust shall be deemed, when acting within the scope of his employment by the
Fund, to be acting in such employment solely for the Trust and not as the
Adviser's employee or agent. 11. DURATION AND TERMINATION OF THIS AGREEMENT.
This Agreement shall remain in force until June 30, 2002, and from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually by (a) a majority of the Trustees who are not interested persons
of the Adviser or (other than as Board members) of the Fund, cast in person at a
meeting called for the purpose of voting on such approval, and (b) either (i)
the Trustees or (ii) a majority of the outstanding voting securities of the
Fund. This Agreement may, on 60 days' written notice, be terminated at any time
without the payment of any penalty by the vote of a majority of the outstanding
voting securities of the Fund, by the Trustees or by the Adviser. Termination of
this Agreement shall not be deemed to terminate or otherwise invalidate any
provisions of any contract between the Adviser and any other series of the
Trust. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this Section 11, the definitions
contained in Section 2(a) of the 1940 Act (particularly the definitions of
"assignment," "interested person" and "voting security") shall be applied. 12.
AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment, transfer, assignment, sale,
hypothecation or pledge of this Agreement shall be effective until approved by
(a) the Trustees, including a majority of the Trustees who are not interested
persons of the Adviser or (other than as Trustees) of the Fund, cast in person
at a meeting called for the purpose of voting on such approval, and (b) a
majority of the outstanding voting securities of the Fund, as defined in the
1940 Act. 13. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of The Commonwealth of Massachusetts. 14. SEVERABILITY.
The provisions of this Agreement are independent of and separable from each
other, and no provision shall be affected or rendered invalid or unenforceable
by virtue of the fact that for any reason any other or others of them may be
deemed invalid or unenforceable in whole or in part. 15. 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. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The name Xxxx Xxxxxxx
U.S. Global Leaders Fund is a series designation of the Trustees under the
Trust's Declaration of Trust. The Declaration of Trust has been filed with the
Secretary of State of The Commonwealth of Massachusetts. The obligations of the
Fund are not personally binding upon, nor shall resort be had to the private
property of, any of the Trustees, shareholders, officers, employees or agents of
the Trust, but only upon the Fund and its property. The Fund shall not be liable
for the obligations of any other series of the Trust and no other series shall
be liable for the Fund's obligations hereunder. Yours very truly, XXXX XXXXXXX
INVESTMENT TRUST III on behalf of Xxxx Xxxxxxx U.S. Global Leaders Fund By:
___________________________ Xxxxxxx X. Xxxx President The foregoing contract is
hereby agreed to as of the date hereof. XXXX XXXXXXX ADVISERS, INC. By:
___________________________ Xxxxx X. Xxxxxx Vice President and Secretary
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