INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 16th day of January, 2004, between Xxxxxxxx
Xxxxx Funds, Inc., a Wisconsin corporation (the "Corporation"), and
Xxxxxxxx Investment Management, LLC, a Delaware limited liability
company (the "Adviser").
W I T N E S S E T H
WHEREAS, the Corporation is an open-end, management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act");
WHEREAS, the Corporation is authorized to issue shares of its
Common Stock, $.001 par value per share, in one or more series;
WHEREAS; the Adviser is, or will be prior to the effective date
of this Agreement, registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Corporation desires to retain the Adviser to render
investment advisory services to certain of its series and the Adviser
is willing to render such services.
NOW, THEREFORE, in consideration of the premises and mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Adviser. The Corporation hereby appoints the
Adviser to act as investment adviser with respect to each mutual fund
series described on Exhibit A hereto (individually, a "Fund" and
collectively, the "Funds") for the periods and on the terms herein
set forth. The Adviser accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
Additional Funds may be added to this Agreement by amendment to
Exhibit A and without the necessity for reapproval of this Agreement
by any Fund then already covered by this Agreement.
2. Duties of Adviser.
(a) Subject to the general supervision of the Board of
Directors of the Corporation, the Adviser shall manage the investment
operations of each Fund and the composition of each Fund's assets,
including the purchase, retention and disposition thereof. In this
regard, the Adviser, with respect to each Fund:
(i) shall provide supervision of the Fund's assets,
furnish a continuous investment program for the Fund, determine from
time to time what investments or securities will be purchased,
retained or sold by the Fund, and what portion of the assets will be
invested or held uninvested as cash;
(ii) shall place orders pursuant to its
determinations either directly with the issuer or with any broker
and/or dealer who deals in the securities in which the Fund is active;
in placing orders, the Adviser shall be entitled to rely upon the
provisions of Section 28(e) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"); and
(iii) may, on occasions when it deems the purchase
or sale of an asset to be in the best interests of the Fund as well
as one or more other clients (including any other investment company
or advisory account for which the Adviser acts as adviser), aggregate,
to the extent permitted by applicable laws and regulations, the
securities to be sold or purchased in order to obtain a more
favorable net price or execution; in such event, 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 the Fund and to such other clients.
(b) The Adviser, in the performance of its duties to each
Fund hereunder, shall (i) act in conformity with the Articles and By-Laws
of the Corporation; the Prospectus, Statement of Additional Information
and Registration Statement in respect of the Fund; all codes, policies
and procedures maintained by the Company and applicable to the Adviser,
including without limitation codes of ethics or conduct and proxy voting
policies; and the instructions and directions of the Board of Directors
of the Corporation; and (ii) comply with and conform to the requirements
of the 1940 Act, the Securities Act of 1933, as amended, the Exchange Act
and all other applicable federal and state laws, regulations and rulings.
(c) The Adviser shall at all times maintain its
registration as an investment adviser under the Advisers Act and
comply in all material respects with the requirements of the
Advisers Act.
(d) The Adviser shall provide, at its own expense, such
office space, personnel, facilities, equipment and other materials,
resources and assets as are necessary or appropriate for the provision
of its services hereunder.
(e) The Adviser shall render to the Board of Directors of
the Corporation such periodic and special reports and information as
the Board may reasonably request.
(f) The services of the Adviser hereunder are not deemed
exclusive and the Adviser shall be free to render similar services to
others so long as its services under this Agreement are not impaired
thereby.
(g) Subject to Section 36 of the 1940 Act, the Adviser
shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Fund in connection with the matters to which
this Agreement relates, except for liability to a Fund 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 its duties, or by reason of its reckless disregard of
its obligations and duties under this Agreement.
3. Expenses.
(a) During the term of this Agreement, the Adviser will
pay all costs incurred by it in connection with the performance of
its duties under paragraph 2 hereof, other than the cost (including
taxes and brokerage commissions, if any) of assets purchased or sold
for the Fund.
(b) In addition to the foregoing, the Adviser may from
time to time at its option (but shall be under no obligation to)
voluntarily assume or undertake to reimburse a Fund for all or a
portion of its expenses not otherwise required to be borne or
reimbursed by the Adviser. Any such voluntary assumption or
undertaking may be discontinued or modified at any time by the
Adviser.
4. Compensation. For the services provided and the expenses
assumed by the Adviser pursuant to this Agreement, each Fund will pay
the Adviser, and the Adviser agrees to accept as full compensation for
all services rendered by it hereunder, an annual management fee as
shown on Exhibit A attached hereto. The foregoing fee will be computed
based on the value of net assets on each day and will be paid to the
Adviser monthly in arrears.
5. Books and Records. The Adviser shall maintain all of the
Fund's records that relate to the provision of investment advisory
services and transactions in portfolio securities for the Fund. The
Adviser agrees that all records which it maintains for the Fund are
the property of the Fund and it will surrender promptly to the Fund
any of such records upon the Fund's request. The Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 of the
Commission under the 1940 Act any such records as are required to be
maintained by it pursuant to Rule 31a-1 of the Commission under the
1940 Act.
6. Duration and Termination. This Agreement will become
effective with respect to a Fund upon approval of a majority of the
outstanding voting securities of such Fund (as defined in the
1940 Act). Unless terminated as hereinafter provided, this Agreement
shall continue in effect for two years from effectiveness of this
Agreement as to such Fund, and thereafter shall continue automatically
for successive periods of one year each so long as each such latter
continuance is approved at least annually by (i) the vote of a
majority of the Board of Directors of the Corporation 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; and (ii) either
by a vote of a majority of the Board of Directors of the Corporation
or by vote of a majority of the outstanding shares of such Fund (as
defined with respect to voting securities in the 1940 Act).
This Agreement may be terminated as to any Fund at any time,
without the payment of any penalty, by the Board of Directors of
the Corporation or by vote of a majority of the outstanding shares
of such Fund (as so defined) on 60 days' written notice to the
Adviser, or by the Adviser at any time, without the payment of
any penalty, on 60 days' written notice to the Corporation. This
Agreement will automatically and immediately terminate in the event
of its assignment (as defined in the 1940 Act and the rules thereunder).
7. Name of the Fund. The Adviser agrees that the words
"Xxxxxxxx Xxxxx," "Xxxxxxxx" or "Xxxxx" may be used in the name of
the Corporation and any mutual fund series and that such name, any
related logos and any service marks containing the words
"Xxxxxxxx Plumb," "Xxxxxxxx" or "Xxxxx" may be used in connection with
their business in perpetuity and that such use shall be royalty free,
whether or not this Agreement or any other advisory agreement with the
Adviser is in effect for the Funds. The Corporation acknowledges that
it has no rights to the name "Xxxxxxxx Plumb," "Xxxxxxxx" or "Xxxxx"
or such logos or service marks other than those granted in this
paragraph and that the Adviser reserves to itself the right to grant
the nonexclusive right to use the words "Xxxxxxxx Xxxxx," "Xxxxxxxx"
or "Xxxxx" or such logos or service marks to any other person,
including, but not limited to, another investment company.
8. Status of Adviser as Independent Contractor. The Adviser
shall for all purposes herein be deemed to be an independent contractor
and shall, unless otherwise expressly provided herein or authorized by
the Board of Directors of the Corporation from time to time, have no
authority to act for or represent the Corporation in any way or
otherwise be deemed an agent of the Corporation.
9. Amendment of Agreement. This Agreement may be amended by
mutual consent, but the consent of a Fund must be approved (a) by
vote of a majority of those Directors of the Corporation who are not
parties to this Agreement or interested persons (as defined in
the 0000 Xxx) of any such party, which vote shall be cast in person
at a meeting called for the purpose of voting on such amendment, and
(b) if such amendment materially changes the advisory relationship or
this Agreement or otherwise requires shareholder approval under the
1940 Act, by vote of a majority of the outstanding shares of such
Fund (as defined with respect to voting securities in the 1940 Act).
10. Miscellaneous. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit 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 this Agreement shall not be affected thereby. This
Agreement shall be construed in accordance with applicable federal
law and the laws of the State of Wisconsin and shall be binding up
and shall inure to the benefit of the parties hereto and their
respective successors, subject to paragraph 6 hereof. Anything herein
to the contrary notwithstanding, this Agreement shall not be construed
to require, or to impose any duty upon, either of the parties to do
anything in violation of any applicable laws or regulations. This
Agreement supersedes any prior agreement between the parties with
respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the date first above written.
XXXXXXXX PLUMB FUNDS, INC.
By:
/s/Xxxxxx X. Xxxxx, President
XXXXXXXX INVESTMENT MANAGEMENT, LLC
By:
/s/Xxxx X. Xxxxxxxx, President
EXHIBIT A TO INVESTMENT ADVISORY AGREEMENT
BETWEEN XXXXXXXX PLUMB FUNDS, INC.
AND
XXXXXXXX INVESTMENT MANAGEMENT, LLC
1.Growth Fund.
The management fee of this Fund, calculated in accordance with
Paragraph 4 of the Investment Advisory Agreement, shall be at the
annual rate of 1.00% of the first $50 million of average daily net
assets of the Fund, and 0.90% of average daily net assets in excess
of $50 million.
0.Xxxx Fund.
The management fee for this Fund, calculated in accordance with
Paragraph 4 of the Investment Advisory Agreement, shall be at the
annual rate of 0.65% of the first $50 million of average daily net
assets of the Fund, and 0.60% of average daily net assets in excess
of $50 million.