EX-99B.5-wrfima.doc
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 31st day of August, 1992, by and between XXXXXXX &
XXXX FUNDS, INC. (hereinafter called "Fund"), and XXXXXXX & XXXX INVESTMENT
MANAGEMENT COMPANY,
WITNESSETH:
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:
I. In General
Xxxxxxx & Xxxx Investment Management Company agrees to act
as investment adviser to Fund with respect to the investment of its assets and
in general to supervise the investments of Fund, subject at all times to the
direction and control of the Board of Directors of Fund, all as more fully set
forth herein.
II. Duties of Xxxxxxx & Xxxx Investment Management Company with
respect to investment of assets of Fund
X. Xxxxxxx & Xxxx Investment Management Company shall
regularly provide investment advice to Fund and shall, subject to the succeeding
provisions of this section, continuously supervise the investment and
reinvestment of cash, securities or other property comprising the assets of the
investment portfolios of Fund; and in furtherance thereof, Xxxxxxx & Xxxx
Investment Management Company shall:
1. obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or one or more of
the portfolios of Fund, and whether concerning the individual companies whose
securities are included in one or more of Fund's portfolios or the industries in
which they engage, or with respect to securities which Xxxxxxx & Xxxx Investment
Management Company considers desirable for inclusion in one or more of Fund's
portfolios;
2. furnish continuously an investment program for each
of the portfolios of Fund;
3. determine what securities shall be purchased or
sold by Fund;
4. take, on behalf of Fund, all actions which appear
to Xxxxxxx & Xxxx Investment Management Company necessary to carry into effect
such investment programs and supervisory functions as aforesaid, including the
placing of purchase and sale orders.
X. Xxxxxxx & Xxxx Investment Management Company shall make
appropriate and regular reports to the Board of Directors of Fund on the actions
it takes pursuant to Section II.A. above. Any investment programs furnished by
Xxxxxxx & Xxxx Investment Management Company under this section, or any
supervisory function taken hereunder by Xxxxxxx & Xxxx Investment Management
Company 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 and any rules or regulations in force thereunder;
2. any other 1applicable provision of law;
3. the provisions of the Articles of Incorporation of
Fund as amended from time to time;
4. the provisions of the Bylaws of Fund as amended
from time to time;
5. the terms of the registration statement of Fund, as
amended from time to time, under the Securities Act of 1933 and the Investment
Company Act of 1940.
C. Any investment programs furnished by Xxxxxxx & Xxxx
Investment Management Company under this section or any supervisory functions
taken hereunder by Xxxxxxx & Xxxx Investment Management Company shall at all
times be subject to any directions of the Board of Directors of Fund, its
Executive Committee, or any committee or officer of Fund acting pursuant to
authority given by the Board of Directors.
III. Allocation of Expenses
The expenses of Fund and the expenses of Xxxxxxx & Xxxx
Investment Management Company in performing its functions under this Agreement
shall be divided into two classes, to wit: (i) those expenses which will be
paid in full by Xxxxxxx & Xxxx Investment Management Company as set forth in
subparagraph "A" hereof, and (ii) those expenses which will be paid in full by
Fund, as set forth in subparagraph "B" hereof.
A. With respect to the duties of Xxxxxxx & Xxxx Investment
Management Company under Section II above, it shall pay in full, except as to
the brokerage and research services acquired through the allocation of
commissions as provided in Section IV hereinafter, for (a) the salaries and
employment benefits of all employees of Xxxxxxx & Xxxx Investment Management
Company who are engaged in providing these advisory services; (b) adequate
office space and suitable office equipment for such employees; and (c) all
telephone and communications costs relating to such functions. In addition,
Xxxxxxx & Xxxx Investment Management Company shall pay the fees and expenses of
all directors of Fund who are employees of Xxxxxxx & Xxxx Investment Management
Company or an affiliated corporation and the salaries and employment benefits of
all officers of Fund who are affiliated persons of Xxxxxxx & Xxxx Investment
Management Company.
B. Fund shall pay in full for all of its expenses which are
not listed above (other than those assumed by Xxxxxxx & Xxxx Investment
Management Company or one of its affiliates in its capacity as principal
underwriter of the shares of Fund, as Shareholder Servicing Agent or as
Accounting Services Agent for Fund), including (a) the costs of preparing and
printing prospectuses and reports to shareholders of Fund, including mailing
costs; (b) the costs of printing all proxy statements and all other costs and
expenses of meetings of shareholders of Fund (unless Fund and Xxxxxxx & Xxxx
Investment Management Company shall otherwise agree); (c) interest, taxes,
brokerage commissions and premiums on fidelity and other insurance; (d) audit
fees and expenses of independent accountants and legal fees and expenses of
attorneys, but not of attorneys who are employees of Xxxxxxx & Xxxx Investment
Management Company or an affiliated company; (e) fees and expenses of its
directors not affiliated with Xxxxxxx & Xxxx, Inc.; (f) custodian fees and
expenses; (g) fees payable by Fund under the Securities Act of 1933, the
Investment Company Act of 1940, and the securities or "Blue-Sky" laws of any
jurisdiction; (h) fees and assessments of the Investment Company Institute or
any successor organization; (i) such nonrecurring or extraordinary expenses as
may arise, including litigation affecting Fund, and any indemnification by Fund
of its officers, directors, employees and agents with respect thereto; (j) the
costs and expenses provided for in any Shareholder Servicing Agreement or
Accounting Services Agreement, including amendments thereto, contemplated by
subsection C of this Section III. In the event that any of the foregoing shall,
in the first instance, be paid by Xxxxxxx & Xxxx Investment Management Company,
Fund shall pay the same to Xxxxxxx & Xxxx Investment Management Companyon
presentation of a statement with respect thereto.
X. Xxxxxxx & Xxxx Investment Management Company or an
affiliate of Xxxxxxx & Xxxx Investment Management Company, may also act as (i)
transfer agent or shareholder servicing agent of Fund and/or as (ii) accounting
services agent of Fund if at the time in question there is a separate agreement,
"Shareholder Servicing Agreement" and/or "Accounting Services Agreement,"
covering such functions between Fund and Xxxxxxx & Xxxx Investment Management
Company, or such affiliate. The corporation, whether Xxxxxxx & Xxxx Investment
Management Company, or its affiliate, which is the party to either such
Agreement with Fund is referred to as the "Agent." Each such Agreement shall
provide in substance that it shall go into effect, or be amended, or a new
agreement covering the same topics between Fund and the Agent may be entered
into, only if the terms of such Agreement, such amendment or such new agreement
have been approved by the Board of Directors of Fund, including the vote of a
majority of the directors who are not "interested persons" as defined in the
Investment Company Act of 1940, of either party to the Agreement, such amendment
or such new agreement (considering Xxxxxxx & Xxxx Investment Management Company
to be such a party even if at the time in question the Agent is an affiliate of
Xxxxxxx & Xxxx Investment Management Company), cast in person at a meeting
called for the purpose of voting on such approval. Such a vote is referred to
as a "disinterested director" vote. Each such Agreement shall also provide in
substance for its continuance, unless terminated, for a specified period which
shall not exceed two years from the date of its execution and from year to year
thereafter only if such continuance is specifically approved at least annually
by a disinterested director vote, and that any disinterested director vote shall
include a determination that (i) the Agreement, amendment, new agreement or
continuance in question is in the best interests of Fund and its shareholders;
(ii) the services to be performed under the Agreement, the Agreement as amended,
new agreement or agreement to be continued are services required for the
operation of Fund; (iii) the Agent can provide services the nature and quality
of which are at least equal to those provided by others offering the same or
similar services; and (iv) the fees for such services are fair and reasonable in
light of the usual and customary charges made by others for services of the same
nature and quality. Any such Agreement may also provide in substance that any
disinterested director vote may be conditioned on the favorable vote of the
holders of a majority (as defined in or under the Investment Company Act of
1940) of the outstanding shares of each class or series of Fund. Any such
Agreement shall also provide in substance that it may be terminated by the Agent
at any time without penalty upon giving Fund one hundred twenty (120) days'
written notice (which notice may be waived by Fund) and may be terminated by
Fund at any time without penalty upon giving the Agent sixty (60) days' written
notice (which notice may be waived by the Agent), provided that such termination
by Fund shall be directed or approved by the vote of a majority of the Board of
Directors of Fund in office at the time or by the vote of the holders of a
majority (as defined in or under the Investment Company Act of 1940) of the
outstanding shares of each class or series of Fund.
IV. Brokerage
(a) Xxxxxxx & Xxxx Investment Management Company may select
brokers to effect the portfolio transactions of Fund on the basis of its
estimate of their ability to obtain, for reasonable and competitive commissions,
the best execution of particular and related portfolio transactions. For this
purpose, "best execution" means prompt and reliable execution at the most
favorable price obtainable. Such brokers may be selected on the basis of all
relevant factors including the execution capabilities required by the
transaction or transactions, the importance of speed, efficiency, or
confidentiality, and the willingness of the broker to provide useful or
desirable investment research and/or special execution services. Xxxxxxx & Xxxx
Investment Management Company shall have no duty to seek advance competitive
commission bids and may select brokers based solely on its current knowledge of
prevailing commission rates.
(b) Subject to the foregoing, Xxxxxxx & Xxxx Investment
Management Company shall have discretion, in the interest of Fund, to direct the
execution of its portfolio transactions to brokers who provide brokerage and/or
research services (as such services are defined in Section 28(e) of the
Securities Exchange Act of 1934) for Fund and/or other accounts for which
Xxxxxxx & Xxxx Investment Management Company or one or more of its affiliates
exercise "investment discretion" (as that term is defined in Section 3(a)(35) of
the Securities Exchange Act of 1934); and in connection with such transactions,
to pay commission in excess of the amount another adequately qualified broker
would have charged if Xxxxxxx & Xxxx Investment Management Company determines,
in good faith, that such commission is reasonable in relation to the value of
the brokerage and/or research services provided by such broker, viewed in terms
of either that particular transaction or the overall responsibilities of Xxxxxxx
& Xxxx Investment Management Company and its investment advisory affiliates with
respect to the accounts for which they exercise investment discretion. In
reaching such determination, Xxxxxxx & Xxxx Investment Management Company will
not be required to attempt to place a specified dollar amount on the brokerage
and/or research services provided by such broker; provided that Xxxxxxx & Xxxx
Investment Management Company shall be prepared to demonstrate that such
determinations were made in good faith, and that all commissions paid by Fund
over a representative period selected by its Board of Directors were reasonable
in relation to the benefits to Fund.
(c) Subject to the foregoing provisions of this Paragraph
"IV," Xxxxxxx & Xxxx Investment Management Company may also consider sales of
Fund's shares and shares of investment companies distributed by Xxxxxxx & Xxxx,
Inc. or one of its affiliates, and portfolio valuation or pricing services as a
factor in the selection of brokers to execute brokerage and principal portfolio
transactions.
V. Compensation of Xxxxxxx & Xxxx Investment Management Company
As compensation in full for services rendered and for the
facilities and personnel furnished under sections I, II, and IV of this
Agreement, Fund will pay to Xxxxxxx & Xxxx Investment Management Company for
each day the fees specified in Exhibit A hereto.
The amounts payable to Xxxxxxx & Xxxx Investment Management
Company shall be determined as of the close of business each day; shall, except
as set forth below, be based upon the value of net assets computed in accordance
with the Articles of Incorporation of Fund; and shall be paid in arrears
whenever requested by Xxxxxxx & Xxxx Investment Management Company. In
computing the value of the net assets of Fund, there shall be excluded the
amount owed to Fund with respect to shares which have been sold but not yet paid
to Fund by Xxxxxxx & Xxxx, Inc.
Notwithstanding the foregoing, if the laws, regulations or
policies of any state in which shares of Fund are qualified for sale limit the
operation and management expenses of Fund, Xxxxxxx & Xxxx Investment Management
Company will refund to Fund the amount by which such expenses exceed the lowest
of such state limitations.
VI. Undertakings of Xxxxxxx & Xxxx Investment Management
Company; Liabilities
Xxxxxxx & Xxxx Investment Management Company shall give to
Fund the benefit of its best judgment, efforts and facilities in rendering
advisory services hereunder.
Xxxxxxx & Xxxx Investment Management Company shall at all
times be guided by and be subject to Fund's investment policies, the provisions
of its Articles of Incorporation and Bylaws as each shall from time to time be
amended, and to the decision and determination of Fund's Board of Directors.
This Agreement shall be performed in accordance with the
requirements of the Investment Company Act of 1940, the Investment Advisers Act
of 1940, the Securities Act of 1933, and the Securities Exchange Act of 1934, to
the extent that the subject matter of this Agreement is within the purview of
such Acts. Insofar as applicable to Xxxxxxx & Xxxx Investment Management
Company, as an investment adviser and affiliated person of Fund, Xxxxxxx & Xxxx
Investment Management Company shall comply with the provisions of the Investment
Company Act of 1940, the Investment Advisers Act of 1940 and the respective
rules and regulations of the Securities and Exchange Commission thereunder.
In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of Xxxxxxx & Xxxx Investment Management Company, it shall not be subject to
liability to Fund or to any stockholder of Fund for any act or omission in the
course of or connected with rendering services thereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
VII. Duration of this Agreement
This Agreement shall become effective at the start of
business on the date hereof and shall continue in effect, unless terminated as
hereinafter provided, for a period of one year and from year-to-year thereafter
only if such continuance is specifically approved at least annually by the Board
of Directors, including the vote of a majority of the directors who are not
parties to this Agreement or "interested persons" (as defined in the Investment
Company Act of 1940) 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 each class or
series of Fund and by the vote of a majority of the directors who are not
parties to this Agreement or "interested persons" (as so defined) of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
VIII. Termination
This Agreement may be terminated by Xxxxxxx & Xxxx
Investment Management Company at any time without penalty upon giving Fund one
hundred twenty (120) days' written notice (which notice may be waived by Fund)
and may be terminated by Fund at any time without penalty upon giving Xxxxxxx &
Xxxx Investment Management Company sixty (60) days' written notice (which notice
may be waived by Xxxxxxx & Xxxx Investment Management Company), provided that
such termination by Fund shall be directed or approved by the vote of a majority
of the Board of Directors of Fund in office at the time or by the vote of a
majority (as defined in the Investment Company Act of 1940) of the outstanding
voting securities of Fund. This Agreement shall automatically terminate in the
event of its assignment, the term "assignment" for this purpose having the
meaning defined in Section 2(a)(4) of the Investment Company Act of 1940 and the
rules and regulations thereunder.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to
be executed by their duly authorized officers and their corporate seal to be
hereunto affixed, all as of the day and year first above written.
(Seal) XXXXXXX & XXXX FUNDS, INC.
By:/s/Xxxxxx X. XxXxxxxxx
-------------------------
Xxxxxx X. XxXxxxxxx
Vice President
ATTEST:
By: /s/Xxxxxx X. Xxxxxx
----------------------
Xxxxxx X. Xxxxxx
Secretary
(Seal) XXXXXXX & XXXX INVESTMENT
MANAGEMENT COMPANY
By: /s/Xxxxxx X. Xxxxxxx
------------------------
Xxxxxx X. Xxxxxxx
Executive Vice President
ATTEST:
By: /s/Xxxxxx X. XxXxxxxxx
--------------------------
Xxxxxx X. XxXxxxxxx
Secretary
EXHIBIT A TO INVESTMENT MANAGEMENT AGREEMENT
XXXXXXX & XXXX FUNDS, INC.
FEE SCHEDULE
(As amended April 20, 1995 to include International Growth Fund and Asset
Strategy Fund)
(As amended July 31, 1997 to include High Income Fund and Science and Technology
Fund)
A cash fee computed each day on net asset value for the series of the Fund and
at the annual rates listed below:
Total Return Fund .71%
Growth Fund .81%
Limited-Term Bond Fund .56%
Municipal Bond Fund .56%
International Growth Fund .81%
Asset Strategy Fund .81%
High Income Fund .66%
Science and Technology Fund .71%
