Exhibit 5(a)(xi)
XXXXXXX FUND, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
July 7, 1997
Xxxxxxx, Xxxxxxx & Xxxxx, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Investment Advisory Agreement
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Xxxxxxx Government Money Market Series
(Formerly Known As Managed Government Securities Fund)
Ladies and Gentlemen:
Xxxxxxx Fund, Inc. (the "Corporation"), has been organized under the
laws of the State of Maryland to engage in the business of an investment
company. The Shares of capital stock of the Corporation ("Shares") are divided
into multiple series, including Xxxxxxx Government Money Market Series (the
"Fund"), as established, from time to time by action of the Directors of the
Corporation. Series or classes may be terminated, and additional series or
classes established, from time to time by action of the Directors. The
Corporation, on behalf of the Fund, has selected you to act as the sole
investment adviser of the Fund and to provide certain other services, as more
fully set forth below, and you are willing to act as such investment adviser and
to perform such services under the terms and conditions hereinafter set forth.
Accordingly, the Corporation agrees with you as follows:
1. Delivery of Documents. The Corporation has furnished you with copies
properly certified or authenticated of each of the following:
(a) The Articles of Incorporation of the Corporation dated
June 18, 1982, as amended from time to time (the
"Articles");
(b) Appropriate evidence of the establishment of the Fund as a
series of the portfolio of the Corporation;
(c) By-Laws of the Corporation as in effect on the date hereof
(the "By-Laws");
(d) Properly certified or authenticated copies of the
Corporation's Registration Statement on Form N-1A filed by
it with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, or the Investment
Company Act of 1940, as amended ("the Investment Company
Act"), together with any financial statements and exhibits
included therein.
The Corporation will furnish you from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
2. Name of Fund. The Fund may use any name derived from the name
"Xxxxxxx, Xxxxxxx & Xxxxx", if it elects to do so, only for so long as this
Agreement, any other Investment Advisory Agreement between you and the
Corporation or any extension, renewal or amendment hereof or thereof remains in
effect, including any similar agreement with any organization which shall have
succeeded to your business as investment adviser. At such time as such an
agreement shall no longer be in effect, the Fund will (to the extent that it
lawfully can) cease to use such a name or any other name indicating that it is
advised by or otherwise connected with you or any organization which shall have
so succeeded to your business.
3. Advisory Services. You will regularly provide the Fund with the
investment research, advice and supervision and will furnish continuously an
investment program for the Fund consistent with the investment objective and
policies of the Fund. You will determine what securities shall be purchased for
the Fund, what securities shall be held or sold by the Fund and what portion of
the Fund's assets shall be held uninvested, subject always to the provisions of
the Corporation's Articles and By-Laws and of the Investment Company Act, and to
the Investment objective, policies and restrictions of the Fund, as each of the
same shall be from time to time in effect, and subject, further, to such
policies and instructions as the Board of Directors may from time to time
establish. You shall advise and assist the officers of the Fund in taking such
steps as are necessary or appropriate to carry out the decisions of the Board of
Directors and the appropriate committees of the Board of Directors regarding the
conduct of the business of the Fund.
4. Allocation of Charges and Expenses. You will pay the compensation
and expenses of all officers and executive employees of the Corporation who are
also employees or affiliates of you or your affiliates and will make available,
without expense to the Fund (except as otherwise provided below), the services
of such of your directors, officers and employees as are reasonably necessary
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for the Fund's operations or as may duly be elected officers or directors of the
Corporation, subject to their individual consent to serve and to any limitations
imposed by law. You will pay the Fund's office rent and will provide investment
advisory research and statistical facilities and all clerical services relating
to research, statistical and investment work. You will not be required to pay
any expenses of the Fund other than those specifically allocated to you in this
paragraph 4. In particular, but without limiting the generality of the
foregoing, you will not be required to pay: organization expenses of the Fund;
clerical salaries; fees and expenses incurred by the Fund in connection with
membership in investment company organizations; brokerage and other expenses of
executing portfolio transactions; payment for portfolio pricing services to a
pricing agent, if any; legal, auditing or account expenses; trade association
dues; taxes or governmental fees; the fees and expenses of the transfer agent of
the Fund; the cost of preparing share certificates or any other expenses,
including clerical expenses of issue, redemption or repurchase of Shares of the
Fund; the expenses and fees for registering and qualifying securities for sale;
the fees and expenses of the Directors of the Corporation who are not employees
or affiliates of you or your affiliates; travel expenses of all officers,
directors and employees; insurance premiums; the cost of preparing and
distributing reports and notices to shareholders; public and investor relations
expenses or the fees or disbursements of custodians of the Fund's assets,
including expenses incurred in the performance of any obligations enumerated by
the Articles or By-Laws insofar as they govern agreements with any such
custodian. You shall not be required to pay expenses of any activity which is
primarily intended to result in sales of Shares of the Fund if and to the extent
that such expenses (i) are required to be borne by a principal underwriter which
acts as the distributor of the Fund's Shares pursuant to an underwriting
agreement which provides that the underwriter shall assume some or all of such
expenses, or (ii) the Corporation on behalf of the Fund shall have adopted a
plan in conformity with Rule 12b-1 under the Investment Company Act of 1940, as
amended, providing that the Fund (or some other party) shall assume some or all
of such expenses. You shall be required to pay such of the foregoing expenses as
are not required to be paid by the principal underwriter pursuant to the
underwriting agreement or are not permitted to be paid by the Fund (or some
other party) pursuant to such a plan.
5. Compensation of the Adviser. For all services to be rendered and
payments made as provided in paragraphs 3 and 4 hereof, the Corporation on
behalf of the Fund will pay you on the last day of each month a gross fee which
is equal to the difference between (a) 1/12 of 0.25 percent of the value of the
average daily net assets of the Fund and (b) the sum, not in excess of the
amount determined under (a), of the amount waived by you from time to time plus
the amount by which the Fund's expenses exceed the lowest applicable expense
limitation (as more fully described herein).
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(a) The "value of the average daily net assets" of the Fund is defined
as the average of the values placed on the net assets of the Fund as of
12:00 noon (New York time), on each day on which the net asset value of the
Fund is determined consistent with the provisions of Rule 22c-1 under the
Investment Company Act or, if the Fund lawfully determines the value of the
net assets of the Fund as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall be determined
pursuant to the applicable provisions of the Articles. If, pursuant to such
provisions, the determination of the net asset value of the Fund is
suspended for any particular business day, then for the purposes of this
paragraph 5, the value of the net assets of the Fund as last determined
shall be deemed to be the value of the net assets of the Fund as of 12:00
noon or as of such other time as the value of the net assets of the Fund may
lawfully be determined, on that day. If the determination of the value of
the net assets of the Fund has been suspended pursuant to the Articles for a
period including such month, your compensation payable at the end of such
month shall be computed on the basis of the value of the net assets of the
Fund as last determined (whether during or prior to such month). If the Fund
determines the value of the net assets of its portfolio more than once on
any day, the last such determination thereof on that day shall be deemed to
be the sole determination thereof on that day for the purposes of this
paragraph 5.
(b) You agree that in determining your gross compensation for any
fiscal year it shall be reduced by the amount, if any, by which the expenses
of the Fund for such fiscal year exceed the lowest applicable expense
limitation established pursuant to the statutes or regulations of any
jurisdiction in which the Shares of the Fund may be qualified for offer and
sale. You shall refund to the Fund the amount of any reduction of your
compensation pursuant to this paragraph 5 as promptly as practicable after
the end of such fiscal year, provided that you will not be required to pay
the Fund an amount greater than the fee paid to you in respect of such year
pursuant to this Agreement. As used in this paragraph 5, "expenses" shall
mean those expenses included in the applicable expense limitation having the
broadest specifications thereof, and "expense limitation" means a limit on
the maximum annual expenses which may be incurred by an investment company
determined (i) by multiplying a fixed percentage by the average, or by
multiplying more than one such percentage by different specified amounts of
the average, of the values of an investment company's net assets for a
fiscal year or (ii) by multiplying a fixed percentage by an investment
company's net investment income for a fiscal year. The words "lowest
applicable expense limitation" shall be construed to result in the largest
reduction of your compensation for any fiscal year of the Fund; provided,
however, that nothing in this Agreement shall limit your fees if not
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required by an applicable statute or regulation referred to above in this
section 5.
(c) You may waive all or a portion of your fees provided for
hereunder. To the extent that you agree to waive all or a portion of your
fees or to reimburse a portion of the Fund's expenses, you shall be
contractually bound by the publicly announced waivers or reimbursements.
6. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither you nor any
of your directors, officers or employees shall act as a principal or agent or
receive any commission. You or your agent shall arrange for the placing of all
orders for the purchase and sale of portfolio securities for the Fund's account
with brokers or dealers selected by you. In the selection of such brokers or
dealers and the placing of such orders, you are directed at all times to seek
for the Fund the most favorable execution and net price available. If any
occasion should arise in which you give any advice to clients of yours
concerning the Shares of the Fund, you shall act solely as investment counsel
for such clients and not in any way on behalf of the Fund. Your services to the
Fund pursuant to this Agreement are not to be deemed to be exclusive and it is
understood that you may render investment advice, management and other services
to others.
7. Limitation of Liability of Adviser.
(a) You shall give the Fund the benefit or your best judgment and efforts in
rendering services under this Agreement. As an inducement to your undertaking to
render these services, the Fund agrees that you shall not be liable under this
Agreement for any mistake in judgment or in any other event whatsoever except
for lack of good faith, provided that nothing in this Agreement shall be deemed
to protect or purport to protect you against any liability to the Fund or its
shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties
under this Agreement or by reason of your reckless disregard of your obligations
and duties hereunder.
(b) Notwithstanding anything herein to the contrary, you shall not be liable or
responsible for any acts of omissions of any predecessor manager or investment
adviser for the Fund or of any other persons having responsibility for matters
to which this Agreement relates prior to January 1, 1989, nor shall you be
responsible for reviewing any such acts or omissions. You shall, however, be
liable for your own acts and omissions subsequent to assuming responsibility
under this Agreement as herein provided.
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8. Duration and Termination of This Agreement. This Agreement shall
remain in force until July 31, 1998, and from year to year thereafter, but only
so long as such continuance is specifically approved at least annually (i) by
the vote of a majority of the Directors who are not interested persons of you or
the Corporation, cast in person at a meeting called for the purpose of voting on
such approval, and (ii) by vote of the Board of Directors, or of a majority of
the outstanding voting securities of the Fund. The aforesaid requirement that
continuance of this Agreement be "specifically approved at least annually" shall
be construed in a manner consistent with the Investment Company Act and the
rules and regulations thereunder. This Agreement may, on 60 day's written
notice, be terminated at any time without the payment of any penalty, by the
Board of Directors, by vote of a majority of the outstanding voting securities
of the Fund or by you. This Agreement shall automatically terminate in the event
of its assignment. In interpreting the provisions of this Agreement, the
definitions contained in Section 2(a) of the Investment Company Act
(particularly the definitions of "interested person", "assignment" and "majority
of the outstanding voting securities"), as from time to time amended, shall be
applied, subject, however, to such exemptions as may be granted by the Security
and Exchange Commission by any rule, regulation or order.
9. 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 of this Agreement shall be
effective until approved by the vote of a majority of the outstanding voting
securities of the Fund and by the Board of Directors, including a majority of
the Directors who are not interested persons of you or of the Corporation, cast
in person at a meeting called for the purpose of voting on such approval.
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. 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.
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If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Corporation, whereupon this letter shall become a binding
contract.
Yours very truly,
XXXXXXX FUND, INC.
on behalf of Xxxxxxx Government
Money Market Series
By: /s/Xxxxxx Xxxxxx
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President
The foregoing Agreement is hereby accepted as of the date thereof.
XXXXXXX, XXXXXXX & XXXXX, INC.
By: /s/Xxxxx X. Xxx
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Managing Director
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