INVESTMENT ADVISORY AGREEMENT
FOR THE OAKMARK SMALL CAP FUND
XXXXXX ASSOCIATES INVESTMENT TRUST, a Massachusetts
business trust registered under the Investment Company Act of 0000
(xxx 0000 Xxx ) as an open-end diversified management investment
company (the Trust ), and XXXXXX ASSOCIATES L.P., a Delaware
limited partnership registered under the Investment Advisers Act of
1940 as an investment adviser (the Adviser ), agree as follows:
1. Appointment of Adviser. The Trust appoints the Adviser to act as
manager and investment adviser to The Oakmark Small Cap Fund (the
Fund ), a series of the Trust, for the period 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.
2. Services of Adviser.
(a) The Adviser shall manage the investment and reinvestment of the
assets of the Fund, subject to the supervision of the board of trustees of
the Trust, for the period and on the terms set forth in this agreement.
The Adviser shall give due consideration to the investment policies and
restrictions and the other statements concerning the Fund in the Trust s
Agreement and Declaration of Trust, bylaws and registration statements
under the 1940 Act and the Securities Act of 1933 (the 1933 Act ),
and to the provisions of the Internal Revenue Code applicable to the
Trust as a regulated investment company. The Adviser shall be
deemed for all purposes to be an independent contractor and not an
agent of the Trust or the Fund, and unless otherwise expressly provided
or authorized, shall have no authority to act or represent the Trust or
the Fund in any way.
(b) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of the Fund with brokers or dealers
selected by the Adviser, although the Fund will pay the actual
brokerage commissions on portfolio transactions in accordance with
Paragraph 4. In executing portfolio transactions and selecting
brokers or dealers, the Adviser will use its best efforts to seek on
behalf of the Fund the best overall terms available for any transaction.
The Adviser shall consider all factors it deems relevant, including the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any (for the
specific transaction and on a continuing basis).
(c) To the extent contemplated by the Trust s registration statement
under the 1933 Act, in evaluating the best overall terms available, and
in selecting the broker or dealer to execute a particular transaction, the
Adviser may also consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act
of 1934) provided to the Fund and/or other accounts over which the
Adviser or an affiliate of the Adviser exercises investment discretion.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. and subject to seeking the most favorable
combination of net price and execution available, the Adviser may
consider sales of shares of the Fund as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund. The
Adviser is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if, but only if, the Adviser determines in good
faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer,
viewed in terms of that particular transaction or in terms of all of the
accounts over which investment discretion is so exercised.
3. Services other than as Adviser. The Adviser (or an affiliate of the
Adviser) may act as broker for the Trust in connection with the
purchase or sale of securities by or to the Trust if and to the extent
permitted by procedures adopted from time to time by the board of
trustees of the Trust. Such brokerage services are not within the scope
of the duties of the Adviser under this agreement, and, within the limits
permitted by law and the trustees, the Adviser (or an affiliate of the
Adviser) may receive
brokerage commissions, fees or other remuneration from the Trust for
such services
in addition to its fee for services as Adviser. Within the limits
permitted by law, the Adviser may receive compensation from the
Trust for other services performed by or for the Trust which are not
within the scope of the duties of the Adviser under this agreement.
4. Expenses to be paid by Adviser. The Adviser shall furnish to the
Trust, at its own expense, such office space and all office facilities,
equipment and personnel necessary to render the services set forth in
paragraph 2 above. The Adviser shall also assume and pay all
expenses incurred by it related to the placement of securities
orders, and all expenses of marketing shares of the Trust.
5. Expenses to be paid by the Trust. The Trust shall pay all expenses
not expressly assumed by the Adviser, including but not limited to: all
charges of depositories, custodians and other agencies for the
safekeeping and servicing of its cash, securities and other property and
of its transfer agents, fund accounting agents, registrars and its
dividend disbursing and redemption agents, if any; all charges of legal
counsel and of independent auditors; all compensation of trustees other
than those affiliated with the Adviser and all expenses incurred in
connection with their services to the Trust; all costs of borrowing
money; all expenses of publication of notices and reports to its
shareholders and to governmental bodies or regulatory agencies; all
expenses of proxy solicitations of the Trust or its board of trustees with
respect to the Fund; all expenses of shareholder meetings; all expenses
of typesetting of the Fund s prospectus and of printing and mailing
copies of the prospectus furnished to each then-existing shareholder
or beneficial owner; all taxes and fees payable to federal, state or other
governmental agencies, domestic or foreign; all stamp or other transfer
taxes; all expenses of printing and mailing certificates for shares of the
Trust; all expenses of bond and insurance coverage required by law or
deemed advisable by the Trust s board of trustees; all expenses of
maintaining the registration of shares of the Trust under the 1933 Act
and of qualifying and maintaining qualification of shares of the Trust
under the securities laws of such United States jurisdictions as the Trust
may from time to time reasonably designate and all expenses of
maintaining the registration of the Trust under the 1940 Act; and all
fees, dues and other expenses related to membership of the Trust in any
trade association or other investment company organization. In
addition to the payment of expenses, the Trust shall also pay all
brokers commissions and other charges relating to the purchase and
sale of portfolio securities.
6. Compensation of Adviser. For the services to be rendered and the
charges and expenses to be assumed and to be paid by the Adviser
hereunder, the Trust shall pay out of Fund assets to the Adviser a
monthly fee, based on the Fund s net assets as of the last business day
of the preceding month, at the annual rate of 1.25% of net assets. The
fee for a month shall be paid as soon as practicable after the last day of
that month. The fee payable hereunder shall be reduced
proportionately during any month in which this agreement is not in
effect for the entire month.
7. Limitation of expenses of the Fund. The total expenses of the
Fund, exclusive of taxes, interest and extraordinary litigation expenses,
but including fees paid to the Adviser, shall not in any fiscal year of
the Trust exceed the most restrictive limits prescribed by any state in
which Fund shares are then being offered for sale, and the
Adviser agrees to reimburse the Fund for any sums expended for such
expenses in excess of that amount. Brokers commissions and other
charges relating to the purchase and sale of portfolio securities shall not
be regarded as expenses.
8. Services of Adviser not exclusive. The services of the Adviser to
the Trust hereunder are not exclusive, and the Adviser shall be free to
render similar services to others so long as its services under this
agreement are not impaired by such other activities.
9. Liability of Adviser. The Adviser shall not be liable to the Trust or
its shareholders for any loss suffered by the Trust or its shareholders
from or as a consequence of any act or omission of the Adviser, or of
any of the partners, employees or agents of the Adviser, in connection
with or pursuant to this agreement, except by reason of willful
misfeasance, bad faith or gross negligence on the part of the Adviser in
the performance of its duties or by reason of reckless disregard by the
Adviser of its obligations and duties under this agreement.
10. Liability of Trust. The obligations of the Trust hereunder shall
not be binding upon any of the trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but shall bind
only the assets and property of the Trust as provided in the Agreement
and Declaration of Trust of the Trust.
11. Use of Adviser s name. The Trust may use the name Xxxxxx
Associates Investment Trust, or any other name derived from the
name Xxxxxx Associates, and the name Oakmark only for so long
as this agreement or any extension, renewal or amendment hereof
remains in effect, including any similar agreement with any
organization which shall have succeeded to the business of the Adviser
as investment adviser. At such time as this agreement or any
extension, renewal or amendment hereof, or such other similar
agreement shall no longer be in effect, the Trust will (by amendment of
its Agreement and Declaration of Trust, if necessary) cease to use any
name derived from the name Xxxxxx Associates, any name similar
thereto or any other name indicating that it is advised by or otherwise
connected with the Adviser, or with any organization which shall have
succeeded to the Adviser s business as investment adviser, and shall
cease to use the name Oakmark or any name derived from the name
Oakmark. The consent of the Adviser to the use of such names by
the Trust shall not prevent the Adviser s permitting any other
enterprise, including another investment company, to use such name or
names.
12. Duration and renewal.
(a) Unless terminated as provided in section 13, this agreement shall
continue in effect until September 30, 1997, and thereafter from year to
year only so long as such continuance is specifically approved at least
annually (a) by a majority of those trustees who are not interested
persons of the Trust or of the Adviser, voting in person at a meeting
called for the purpose of voting on such approval, and (b) by
either the board of trustees of the Trust or a vote of the holders of a
majority of the outstanding shares of the Fund (which term as used
throughout this agreement shall be construed in accordance with the
definition of vote of a majority of the outstanding voting securities of
a company in section 2(a)(42) of the 1940 Act).
(b) Any approval of this agreement by the holders of a majority of the
outstanding shares of the Fund shall be effective to continue this
agreement notwithstanding that it has not been approved by the vote of
a majority of the outstanding shares of the Trust, unless such approval
shall be required by any other applicable law or otherwise.
13. Termination. This agreement may be terminated at any time,
without payment of any penalty, by the board of trustees of the Trust,
or by a vote of the holders of a majority of the outstanding shares of
the Fund, upon 60 days written notice to the Adviser. This agreement
may be terminated by the Adviser at any time upon 60
days written notice to the Trust. This agreement shall terminate
automatically in the event of its assignment (as defined in section
2(a)(4) of the 1940 Act).
14. Amendment. This agreement may not be amended without the
affirmative vote (a) of a majority of those trustees who are not
interested persons (as defined in Section 2(a)(19) of the 0000 Xxx) of
the Trust and (b) of the holders of a majority of the outstanding shares
of the Fund.
Dated: August 30, 1996
XXXXXX ASSOCIATES INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxxxxxxx
XXXXXX ASSOCIATES L.P.
by Xxxxxx Associates, Inc.
its General Partner
By:/s/ Xxxxxx X. Xxxxxxxxxxx
