INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, made this 24 day of February 1998, by
and between XXXXXXX ASSET MANAGEMENT COMPANY, INC., a Delaware corporation
having its principal place of business in Bethesda, Maryland (the "Advisor"),
and XXXXXXX SOCIAL INVESTMENT FUND, a Massachusetts business trust created
pursuant to a Declaration of Trust filed with the Secretary of State of the
Commonwealth of Massachusetts (the "Trust").
WHEREAS, the Trust is registered as an open-end investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), for the
purpose of investing and reinvesting its assets in securities, as set forth in
its Declaration of Trust, its By-laws and its registration statements under
the 1940 Act and the Securities Act of 1933 as amended (the "1933 Act"), the
Trust has registered separate series of shares of beneficial interest for sale
to the public; and the Trust desires to avail itself of the services,
information, advice, assistance and facilities of an investment advisor and to
have an investment advisor perform for it various investment advisory and
research services, and other management services; and
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
rendering management and investment advisory services to investment companies
and desires to provide such services to the Trust;
NOW, THEREFORE in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Advisor. The Trust hereby employs the
Advisor to manage the investment and reinvestment of the assets of those
separate series of the Trust specified in one or more Schedules attached
hereto and made a part of this Agreement (each a "Fund"), subject to the
control and direction of the Trust's Board of Trustees, for the period and on
the terms hereinafter set forth. The Advisor hereby accepts such employment
and agrees during such period to render the services and to assume the
obligations herein set forth for the compensation herein provided. The
Advisor shall for all purposes herein be deemed to be an independent
contractor and shall, except as expressly provided or authorized (whether
herein or otherwise), have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
2. Obligations of and Services to be Provided by the Advisor.
The Advisor undertakes to provide the following services and to assume the
following obligations:
a. The Advisor shall manage the investment and
reinvestment of each Fund's assets, subject to and
in accordance with the investment objectives and
policies of the Fund, and the social investment
criteria, as stated in the then current prospectus
and statement of additional information for the Fund
and any directions which the Trust's Board of
Trustees may issue from time to time. In pursuance
of the foregoing, the Advisor shall make all
determinations with respect to the investment of
each Fund's assets and the purchase and sale of
portfolio securities and shall take such steps as
may be necessary to implement the same. Such
determination and services shall also include
determining the manner in which voting rights,
rights to consent to corporate action, any other
rights pertaining to a Fund's portfolio securities
shall be exercised. The Advisor shall render
regular reports to the Trust's Board of Trustees
concerning each Fund's investment activities.
b. The Advisor shall, in the name of the Trust on
behalf of each Fund, place orders for the execution
of the Fund's portfolio transactions in accordance
with the policies with respect thereto set forth in
the Trust's registration statement under the 1940
Act and the 1933 Act, as applicable to the Fund as
such registration statement may be amended from time
to time. In connection with the placement of orders
for the execution of each Fund's portfolio
transactions, the Advisor shall create and maintain
all necessary brokerage records of the Fund in
accordance with all applicable laws, rules and
regulations, including but not limited to records
required by Section 31(a) of the 1940 Act. All
records shall be the property of the Trust and shall
be available for inspection and use by the
Securities and Exchange Commission (the "SEC"), the
Trust or any person retained by the Trust. Where
applicable, such records shall be maintained by the
Advisor for the periods and the places required by
Rule 31a-2 under the 1940 Act.
c. The Advisor shall bear its expenses of providing
services to the Trust and each Fund pursuant to this
Agreement except such expenses as are undertaken by
the Trust or the Fund. In addition, the Advisor
shall pay the salaries and fees of all Trustees, and
executive officers who are employees of the Advisor
or its affiliates ("Advisor Employees").
d. In providing the services and assuming the obligations
set forth herein, the Advisor may, at its expense,
employ one or more Subadvisors. References herein to the
Advisor shall include any Subadvisor employed by the
Advisor. Any agreement between the Advisor and a
Subadvisor shall be subject to the Renewal, Termination
and Amendment provisions of paragraph 10 hereof.
e. The Advisor is responsible for screening investments to
determine that they meet the Fund's social investment
criteria, as may be amended from time to time by the
Trustees.
3. Expenses of Each Fund. Each Fund shall pay all expenses
other than those expressly assumed by the Advisor. Expenses payable by the
Fund shall include, but are not limited to:
a. Fees to the Advisor as provided herein:
b. Legal and audit expenses;
c. Fees and expenses related to the registration and
qualification of the Fund and its shares for
distribution under federal and state securities
laws;
d. Expenses of the administrative service agent,
transfer agent, registrar, custodian, dividend
disbursing agent and shareholder servicing agent;
e. Salaries, fees and expenses of Trustees and
executive officers of the Trust, other than Advisor
Employees;
f. Taxes and corporate fees levied against the Fund;
g. Brokerage commissions and other expenses associated
with the purchase and sale of portfolio securities
for the Fund;
h. Expenses, including interest, of borrowing money;
i. Expenses incidental to meetings of the Fund's
shareholders and the Fund's allocable portion of
the expenses incidental to the maintenance of the
Trust's organizational existence;
j. Expenses of printing stock certificates
representing shares of the Fund and expenses of
preparing, printing and mailing notices, proxy
material, reports to regulatory bodies and reports
to shareholders of the Fund;
k. Expenses of preparing and typesetting of
prospectuses of the Fund;
l. Expenses of printing and distributing prospectuses
to shareholders of the Fund;
m. The Fund's allocable portion of association
membership dues of the Trust;
n. Insurance premiums for fidelity and other coverage;
and
o. Distribution Plan expenses, as permitted by Rule
12b-1 under the 1940 Act and as authorized by the
Trustees.
4. Compensation of Advisor
a. As compensation for the services rendered and
obligations assumed hereunder by the Advisor, the
Trust, on behalf of each Fund, shall pay to the
Advisor advisory fees as specified in one or more
Schedules attached hereto and made part of this
Agreement. Such fees shall be payable within ten
(10) days after the last day of each calendar
month. Upon termination of this Agreement before
the end of any calendar month, the fee for such
period shall be prorated in the manner set forth in
one or more attached Schedules. The Schedules may
be amended from time to time, provided that
amendments thereto are made in conformity with
applicable laws and regulations and the
Declaration of Trust and By-laws of the Trust. Any
amendment to a Schedule pertaining to any new or
existing Fund shall not be deemed to affect the
interest of any other Fund and shall not require
the approval of the shareholders of any other Fund.
b. The Advisor reserves the right (i) to waive all or
part of its fee and assume expenses of the Fund
and (ii) to make payments to brokers and dealers in
consideration of their promotional or
administrative services.
5. Activities of the Advisor. The services of the Advisor to
the Trust and each Fund hereunder are not to be deemed exclusive, and the
Advisor shall be free to render similar services to others. It is understood
that Trustees and officers of the Trust are or may become interested in the
Advisor as stockholders, officers, or otherwise , and that stockholders and
officers of the Advisor are or may become similarly interested in the Trust,
and that the Advisor may become interested in the Trust as shareholder or
otherwise.
6. Use of Names. The Trust or any Fund shall not use the name
of the Advisor in any prospectus, sales literature or other material relating
to the Trust in any manner not approved prior thereto by the Advisor;
provided, however, that the Advisor shall approve all uses of its name which
merely refer in accurate terms to its appointment hereunder or which are
required by the SEC or a State Securities Commission; and, provided, further,
that in no event shall such approval be unreasonably withheld. The Advisor
shall not use the name of the Trust or any Fund in any material relating to
the Advisor in any manner not approved prior thereto by the Trust; provided,
however, that the Trust shall approve all uses of its name which merely refer
in accurate terms to the appointment of the Advisor hereunder or which are
required by the SEC or a State Securities Commission; and, provide, further,
that in no event shall such approval be unreasonably withheld.
The Trustees of the Trust acknowledge that, in consideration of the
Advisor's assumption of certain expenses of formation of the Trust, the
Advisor has reserved for itself the rights to the name "Xxxxxxx Social
Investment Fund" (or any similar name) and that use by the Trust of such name
shall continue only with the continuing consent of the Advisor, which consent
may be withdrawn at any time, effective immediately, upon written notice
thereof to the Trust.
7. Liability of the Advisor. Absent willful misfeasance, bad
faith, gross negligence, or reckless disregard of obligations or duties
hereunder on the part of the Advisor, the Advisor shall not be subject to
liability to the Trust or to any shareholder of the Trust for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
8. Limitation of Trust's Liability. The Advisor acknowledges
that it has received notice of and accepts the limitations upon the Trust's
liability set forth in Article XI of its Declaration of Trust. The Advisor
agrees that the Trust's obligations hereunder in any case shall be limited to
the Trust and to its assets and that the Advisor shall not seek satisfaction
of any such obligation from the shareholders of the Trust nor from any
Trustees, officer, employee or agent of the Trust.
9. Force Majeure. The Advisor shall not be liable for delays
or errors occurring by reason of circumstances beyond its control, including
but not limited to acts of civil or military authority, national emergencies,
work stoppages, fire, flood, catastrophe, acts of God, insurrection, war,
riot, or failure of communication or power supply. In the event of equipment
breakdowns beyond its control, the Advisor shall take reasonable steps to
minimize service interruptions but shall have no liability with respect
thereto.
10. Renewal, Termination and Amendment. This Agreement shall
continue in effect with respect to each Fund, unless sooner terminated as
hereinafter provided for two years from the effective date as to that Fund,
and indefinitely thereafter if its continuance after such one year period
shall be specifically approved at least annually by vote of the holders of a
majority of the outstanding voting securities of the Fund or by vote of a
majority of the Trust's Board of Trustees; and further provided that such
continuance is also approved annually by the vote of a majority of the
Trustees who are not parties to this Agreement or interested persons of the
Advisor, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may be terminated at any time with respect to a
Fund, without payment of any penalty, by the Trust's Board of Trustees or by
vote of the majority of the outstanding voting securities of the Fund upon 60
days' prior written notice to the Advisor and by the Advisor upon 60 days'
prior written notice to the Trust. This Agreement may be amended with respect
to a Fund at any time by the parties, subject to approval by the Trust's Board
of Trustees and, if required by applicable SEC rules and regulations, a vote
of a majority of the Fund's outstanding voting securities. This Agreement
shall terminate automatically in the event of its assignment. The terms
"assignment", "interested person", and "vote of a majority of the outstanding
voting securities" shall have the meaning set forth for such terms in the 1940
Act.
11. Severability. 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.
12. Miscellaneous. Each party agrees to perform such further
actions and execute such further documents as are necessary to effectuate the
purposes hereof. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Maryland. The captions in this
Agreement are included for convenience only and in no way define or delimit
any of the provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
XXXXXXX SOCIAL INVESTMENT FUND
By:
XXXXXXX ASSET MANAGEMENT COMPANY, INC.
By:
Schedule dated February 24, 1998 to the
Investment Advisory Agreement
between
Xxxxxxx Asset Management Company, Inc.
and
Xxxxxxx Social Investment Fund
Managed Index Portfolio
1. Compensation. As compensation pursuant to Section 4 of the Investment
Advisory Agreement between Xxxxxxx Asset Management Company, Inc. ("Advisor")
and Xxxxxxx Social Investment Fund ("Trust") dated February 24, 1998, with
respect to the above-referenced Portfolio of the Trust ("Fund"), the Advisor is
entitled to receive from the Fund an advisory fee ("Fee").
The annual Fee shall be computed daily and payable monthly, at an annual
rate of
0.60% of the first $500 million of average daily net assets of the Fund, and
0.55% of any such assets over $500 million.
2. Recapture of Waived Fees and Reimbursed Expenses. a. The Advisor may,
but is not required by this Agreement, to waive current payment of its fees, or
to reimburse expenses of the Fund. Any fees the current payment of which is
waived by the Advisor and any expenses paid on behalf of or reimbursed to the
Portfolio by the Advisor through February 29, 2000, may be recaptured by the
Advisor from the Portfolio during the two years beginning March 1, 2000, and
ending February 28, 2002. Such recapture shall only be made to the extent that
it does not result in the Portfolio's Class A aggregate expenses exceeding on an
annual basis 2.00% of Class A average daily net assets, and 3.25%, 3.25% and
1.25%, respectively for Class B, Class C and Class I.
b. The Advisor may voluntarily make additional fee waivers or expense
reimbursements with respect to the Portfolio from March 1, 2000 through February
28, 2002, ("Additional Period"); provided, however, that (a) any fees the
current payment of which is waived by the Advisor and any expenses paid on
behalf of or reimbursed to the Portfolio by the Advisor during the Additional
Period may be recaptured by the Advisor from the Portfolio during the two years
beginning March 1, 2002 and ending February 29, 2004 and (b) such recapture
shall only be made to the extent that it does not result in the Portfolio's
Class A aggregate expenses exceeding on an annual basis 2.00% of Class A average
daily net assets, and 3.25%, 3.25% and 1.25%, respectively for Class B, Class C
and Class I.
