Exhibit 5.b
FORM OF
XXXXXX XXXXXXXX & XXXXXXXX, LLP
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 31st day of May, 1997 by and between Xxxxxx Xxxxxxx
Universal Funds, Inc., a Maryland corporation (the "Fund") and Xxxxxx Xxxxxxxx &
Xxxxxxxx, LLP, a Pennsylvania limited liability partnership (the "Adviser").
1. Duties of Adviser. The Fund hereby appoints the Adviser to act as
investment adviser to the investment funds (the "Portfolios") of the Fund as set
forth on Schedule A attached hereto, for the period and on such terms as set
forth in this Agreement. The Fund employs the Adviser to manage the investment
and reinvestment of the assets of the Portfolios, to continuously review,
supervise and administer the investment program of each of the Portfolios, to
determine in its discretion the securities to be purchased or sold and the
portion of each Portfolios' assets to be held uninvested, to provide the Fund
with records concerning the Adviser's activities which the Fund is required to
maintain, and to render regular reports to the Fund's officers and Board of
Directors concerning the Adviser's discharge of the foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to the
control of the officers and the Board of Directors of the Fund, and in
compliance with the objectives, policies and limitations set forth in the Fund's
prospectus and applicable laws and regulations. The Adviser accepts such
employment and agrees to render the services and to provide, at its own expense,
the office space, furnishings and equipment and the personnel required by it to
perform the services on the terms and for the compensation provided herein.
2. Portfolio Transactions. The Adviser is authorized to select the brokers
or dealers that will execute the purchases and sales of securities for each of
the Portfolios and is directed to use its best efforts to obtain the best
available price and most favorable execution, except as prescribed herein.
Unless and until otherwise directed by the Board of Directors of the Fund, the
Adviser is authorized to effect individual securities transactions at commission
rates in excess of the minimum commission rates available, if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Adviser's overall responsibilities with respect to the Fund. The execution of
such transactions shall not be deemed to represent an unlawful act or breach of
any duty created by this Agreement or otherwise. The Adviser will promptly
communicate to the officers and Directors of the Fund such information relating
to portfolio transactions as they may reasonably request.
3. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser, at the end of each of the Fund's fiscal quarters, an advisory fee
calculated by applying a quarterly rate, based on the annual percentage rates as
set forth in Schedule B attached hereto with respect to the average daily net
assets of each of the Portfolios for the quarter.
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In the event of termination of this Agreement, the fees provided in this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current fiscal quarter as a percentage of
the total number of days in such quarter.
4. Other Services. At the request of the Fund, the Adviser in its
discretion may make available to the Fund office facilities, equipment,
personnel and other services. Such office facilities, equipment, personnel and
services shall be provided for or rendered by the Adviser and billed to the Fund
at the Adviser's cost.
5. Reports. The Fund and the Adviser agree to furnish to each other
current prospectuses, statements of additional information, proxy statements,
reports to stockholders, certified copies of their financial statements, and
such other information with regard to their affairs as each may reasonably
request.
6. Status of Adviser. The services of the Adviser to the Fund are not to
be deemed exclusive, and the Adviser shall be free to render similar services to
others.
7. Liability of Adviser. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940, as amended
("1940 Act")), the Adviser shall not be subject to any liability whatsoever to
the Fund, or to any stockholder of the Fund, for any error of judgment, mistake
of law or any other act or omission in the course of, or connected with,
rendering services hereunder including, without limitation, for any losses that
may be sustained in connection with the purchase, holding, redemption or sale of
any security on behalf of any of the Portfolios.
8. Permissible Interests. Subject to and in accordance with the Articles
of Incorporation of the Fund and the Limited Partnership Agreement of the
Adviser, Directors, officers, agents and stockholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as partners, employees,
officers, agents, or otherwise; partners, employees and agents of the Adviser
are or may be interested in the Fund as Directors, officers, stockholders or
otherwise; and the Adviser (or any successor) is or may be interested in the
Fund as a stockholder or otherwise; and that the effect of any such
interrelationships shall be governed by said Articles of Incorporation, Limited
Partnership Agreement and the provisions of the 1940 Act.
9. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of the end of two years after
the date first written above or a date within such two-year period as
specifically approved (a) by the vote of a majority of those members of the
Board of Directors of the Fund who are not parties to this Agreement or
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interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Board of Directors of the
Fund or by vote of a majority of the outstanding voting securities of each of
the Portfolios; and thereafter shall continue for periods of one year so long as
such continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Board of Directors of the Fund who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of each of the Portfolios; provided, however, that
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if the holders of any Portfolios fail to approve the Agreement as provided
herein, the Adviser may continue to serve in such capacity in the manner and to
the extent permitted by the 1940 Act and rules thereunder. This Agreement may
be terminated with respect to any of the Portfolios at any time, without the
payment of any penalty, by vote of a majority of the entire Board of Directors
of the Fund or by vote of a majority of the outstanding voting securities of the
Portfolio on 60 days' written notice to the Adviser. This Agreement may be
terminated by the Adviser at any time, without the payment of any penalty, upon
90 days' written notice to the Fund. This Agreement will automatically and
immediately terminate in the event of its assignment, provided that an
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assignment to a corporate successor to all or substantially all of the Adviser's
business or to a wholly-owned subsidiary of such corporate successor which does
not result in a change of actual control of the Adviser's business shall not be
deemed to be an assignment for the purposes of this Agreement. Any notice under
this Agreement shall be given in writing, addressed and delivered or mailed
postpaid, to the other party at any office of such party and shall be deemed
given when received by the addressee.
As used in this Section 9, the terms "assignment," "interested persons,"
and "a vote of a majority the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
10. Amendment of Agreement. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors of the Fund who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) by vote of a
majority of the outstanding voting securities of each of the Portfolios.
11. Use of Name. The Fund agrees that if this Agreement is terminated and
the Adviser shall no longer be the adviser to the Fund, the Fund will, within a
reasonable period of time, change its name to delete the reference to "Xxxxxx
Xxxxxxx."
12. Severability. If any provisions 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.
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13. Applicable Law. This Agreement shall be construed in accordance with
the laws of the State of New York, provided, that nothing herein shall be
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construed as being inconsistent with the 1940 Act.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the day and year
first written above.
XXXXXX XXXXXXXX & XXXXXX XXXXXXX
XXXXXXXX, LLP UNIVERSAL FUNDS, INC.
By: By:
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Name: Name:
Title: Title:
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SCHEDULE A
TO
INVESTMENT ADVISORY AGREEMENT DATED AS OF MAY 31, 1997
BY AND BETWEEN
XXXXXX XXXXXXX UNIVERSAL FUNDS, INC.
AND
XXXXXX XXXXXXXX & XXXXXXXX, LLP
PORTFOLIOS
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1. Fixed Income Portfolio
2. High Yield Portfolio
3. Core Equity Portfolio
4. Value Portfolio
5. Mid Cap Growth Portfolio
6. Mid Cap Value Portfolio
7. International Fixed Income Portfolio
8. Balanced Portfolio
9. Multi-Asset-Class Portfolio
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SCHEDULE B
TO
INVESTMENT ADVISORY AGREEMENT DATED AS OF MAY 31, 1997
BY AND BETWEEN
XXXXXX XXXXXXX UNIVERSAL FUNDS, INC.
AND
XXXXXX XXXXXXXX & XXXXXXXX, LLP
ADVISORY FEES FOR THE FUND'S PORTFOLIOS ADVISED BY MAS
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ASSETS
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PORTFOLIO FIRST $500 MILLION FROM $500 MILLION MORE THAN $1BILLION
TO $1 BILLION
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Fixed Income 0.40% 0.35% 0.30%
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High Yield 0.50% 0.45% 0.40%
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Core Equity 0.55% 0.50% 0.45%
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Value 0.55% 0.50% 0.45%
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Mid Cap Growth 0.75% 0.70% 0.65%
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Mid Cap Value 0.75% 0.70% 0.65%
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International Fixed 0.50% 0.45% 0.40%
Income
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Balanced 0.50% 0.45% 0.40%
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Multi-Asset-Class 0.65% 0.60% 0.55%
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