EXHIBIT 5(A)(I)
INVESTMENT ADVISORY CONTRACT
Xxxxxx Insight Funds (the "Trust"), a Massachusetts business trust
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end diversified management investment company, and Xxxxxx
Trust and Savings Bank, an Illinois bank (the "Adviser"), agree as follows:
1. APPOINTMENT OF ADVISER. The Trust appoints the Adviser to furnish
investment advisory and other services to the Trust for its Equity Income Fund,
Growth Fund, Index Fund, Small-Cap Opportunity Fund, International Fund,
Balanced Fund, Convertible Securities Fund, Bond Fund, Intermediate Government
Bond Fund, Tax-Exempt Bond Fund and Intermediate Tax-Exempt Bond Fund (the
"Funds"), and the Adviser accepts that appointment, for the period and on the
terms set forth below. In the event that the Trust establishes one or more
portfolios other than the Funds named above with respect to which it desires to
retain the Adviser to act as investment adviser hereunder, it shall notify the
Adviser in writing. If the Adviser is willing to render such services under this
Agreement, it shall notify the Trust in writing whereupon such portfolio shall
become a Fund hereunder and shall be subject to the provisions of this Agreement
to the same extent as the Funds named above except to the extent that said
provisions (including those relating to the compensation payable by the Fund to
the Adviser) are modified with respect to such Fund in writing by the Trust and
the Adviser at the time.
2. SERVICES OF ADVISER.
(a) INVESTMENT MANAGEMENT. Subject to the overall supervision and
control of the Board of Trustees of the Trust (the "Board of Trustees"), the
Adviser shall have supervisory responsibility for the general management and
investment of the Funds' assets, giving due consideration to the investment
policies and restrictions, portfolio transaction policies and the other
statements concerning the Funds in the Trust's Declaration of Trust, by-laws and
registration statements under the 1940 Act and the Securities Act of 1933, as
amended (the "1933 Act"), to the provisions of the 1933 Act and the 1940 Act and
rules and regulations thereunder, to the provisions of the Internal Revenue Code
applicable to the Funds as regulated investment companies and to other
applicable law (the "Investment Policies and Restrictions"). It is understood
that the Adviser intends to enter into a portfolio management contract (a
"Subadvisory Contract") with Xxxxxx Investment Management, Inc. (the
"Subadviser"). The Subadviser or any successor to a Subadviser shall have the
responsibilities and duties set forth in Section 3 below and in its respective
Subadvisory Contract. As long as the Subadvisory Contract is in effect, the
services provided by the Adviser will be limited to the supervision and
oversight of the Subadviser's performance under the Subadvisory Contract.
(b) MONITORING SUBADVISER. The Adviser shall monitor and evaluate the
investment performance of the Subadviser; and shall monitor the investment
activities of the Subadviser to ensure compliance with the Investment Policies
and Restrictions.
(c) REPORTS AND INFORMATION. The Adviser shall furnish to the Board of
Trustees periodic reports on the investment strategy and performance of the
Funds and such additional reports and information as the Board of Trustees or
the officers of the Trust may reasonably request.
(d) CUSTOMERS OF FINANCIAL INSTITUTIONS. It is understood that the
Adviser may, but shall not be obligated to, provide, either directly or through
agents, administrative and other services with respect to shareholders who are
customers of the Adviser or its affiliates, including establishing shareholder
accounts, assisting the Trust's transfer agent with respect to recording
purchase and redemption transactions, advising shareholders about the status of
their accounts, current yield and dividends declared and such related services
as the shareholders or the Funds may request. It is further understood that the
Adviser may, but shall not be obligated to, make payments from its own resources
to other financial institutions that provide similar services to shareholders of
the Funds that are customers of such institutions. Notwithstanding the
foregoing, the Adviser shall not provide any distribution services to the Trust
that the Adviser is legally precluded from providing under the Xxxxx-Xxxxxxxx
Act or other applicable law.
(e) UNDERTAKINGS OF ADVISER. The Adviser further agrees that it will:
(i) Comply with the 1940 Act and with all applicable rules and
regulations of the Securities and Exchange Commission, the provisions of the
Internal Revenue Code relating to regulated investment companies, applicable
banking laws and regulations, and policy decisions and procedures adopted by the
Board of Trustees from time to time;
(ii) Select broker-dealers in accordance with guidelines established by
the Board of Trustees from time to time and in accordance with applicable law
(consistent with this obligation, when the execution and price offered by two or
more brokers or dealers are comparable, the Adviser may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers who
provide the Adviser with research advice and other services);
(iii) Maintain books and records with respect to the securities
transactions of the Funds; and
(iv) Treat confidentially and as proprietary information of the Trust
all records and other information relative to the Trust or to prior, present or
potential shareholders, and will not use such records or information for any
purpose other than in the performance of its responsibilities and duties
hereunder, except (A) after prior notification to and approval in writing by the
Trust, which approval shall not be unreasonably withheld, (B) when so requested
by the Trust, (C) as required by tax authorities or (D) pursuant to a judicial
request, requirement or order, provided that the Adviser takes reasonable steps
to provide the Trust with prior notice in order to allow the Trust to contest
such request, requirement or order.
(f) BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Adviser agrees that all records that it maintains
for the Trust are the property of the Trust and further agrees to surrender
promptly to the Trust any of such records upon the
Trust's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
(g) INDEPENDENT CONTRACTOR. The Adviser shall for all purposes herein
be deemed to be an independent contractor and not an agent of the Trust and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Trust in any way.
3. SERVICES OF SUBADVISER. Subject to the overall supervision and
control of the Board of Trustees and the Adviser and pursuant to the terms of
its Subadvisory Contract, the Subadviser shall manage the investment and
reinvestment of the Funds' assets giving due consideration to the Investment
Policies and Restrictions. The Adviser shall not be responsible or liable for
the investment merits of any decision by a Subadviser to purchase, hold or sell
a security for the portfolio of a Fund.
4. EXPENSES BORNE BY TRUST. Except as otherwise provided in this
Agreement or any other contract to which the Trust is a party, the Trust shall
pay all expenses incidental to its organization, operations and business
including, without limitation: all charges of depositories, custodians,
sub-custodians and other agencies for the safekeeping and servicing of its cash,
securities and other property, and of its transfer, shareholder recordkeeping,
dividend disbursing and redemption agents, if any; all charges for equipment or
services used for obtaining price quotations; all charges for accounting
services provided to the Trust by the custodian, the Adviser or any other
provider of accounting services; all expenses of portfolio pricing, net asset
value computation and reporting portfolio information to the Adviser or
Subadviser; all charges for services of administration; all charges of
independent auditors and legal counsel; all compensation of the Trustees other
than those affiliated with any entity providing advisory or administrative
services to the Trust, and all expenses incurred in connection with their
services to the Trust; all expenses of preparing, printing and distributing
notices, proxy solicitation material and reports to shareholders of the Funds;
all expenses of meetings of shareholders; all expenses of preparation and
printing of annual or more frequent revisions of the Funds' prospectus(es) and
of supplying each then existing shareholder or beneficial owner of shares of the
Funds with a copy of such revised prospectus(es); all expenses related to
preparing and transmitting certificates representing shares of the Funds, if
any; all expenses of bond and insurance coverage required by law or deemed
advisable by the Board of Trustees; all costs of borrowing money; all taxes and
corporate fees payable to Federal, state or other governmental agencies,
domestic or foreign; all stamp or other transfer taxes; all expenses of
registering and maintaining the registration of the Trust under the 1940 Act and
of shares of the Funds under the 1933 Act, of qualifying and maintaining
qualification of the Trust and of shares of the Funds for sale under securities
laws of various states or other jurisdictions and of registration and
qualification of the Trust under all other laws applicable to the Trust or its
business activities; all payments pursuant to a plan adopted on behalf of the
Funds pursuant to Rule 12b-1 under the 1940 Act; all fees, dues and other
expenses incurred by the Trust in connection with membership of the Trust in any
trade association or other investment company organization; and extraordinary
expenses. In addition the Funds shall pay all broker's commissions and other
charges relating to the purchase and sale of portfolio securities or other
assets of the Funds.
5. ALLOCATION OF EXPENSES BORNE BY TRUST. Any expenses borne by the
Trust that are attributable solely to the organization, operation or business of
the Funds shall be paid solely out of assets of the Funds. Any expense borne by
the Trust that is not solely attributable to the Funds, nor solely to any other
portfolio of the Trust, shall be apportioned in such manner as the Trust or an
administrator for the Trust determines is fair and appropriate, or as otherwise
specified by the Board of Trustees.
6. EXPENSES BORNE BY ADVISER. The Adviser at its own expense shall
furnish personnel, office space and office facilities and equipment required to
render its services pursuant to this Agreement and shall be responsible for
payment of the fees of the Subadviser pursuant to the Subadvisory Contract (but
the Adviser shall not be responsible for any expenses such Subadviser may incur
in connection with their performance of services for the Trust).
7. COMPENSATION OF ADVISER. For the services to be rendered and the
expenses to be assumed and to be paid by the Adviser under this Agreement, the
Trust shall pay to the Adviser a fee, computed and accrued daily and payable on
the first business day of each month, at the following annual rates considered
separately on a portfolio-by-portfolio basis: 1.05% of the average daily net
assets of the International Fund; 1.00% of the average daily net assets of the
Small-Cap Opportunity Fund; 0.90% of the average daily net assets of the Growth
Fund; 0.70% of the average daily net assets of the Equity Income Fund and the
Convertible Securities Fund; 0.60% of the average daily net assets of the
Tax-Exempt Bond Fund, the Intermediate Tax-Exempt Bond Fund and the Balanced
Fund; 0.65% of the average daily net assets of the Bond Fund and the
Intermediate Government Bond Fund; and 0.15% of the average daily net assets of
the Index Fund. Such fees as are attributable to each Fund shall be a separate
charge to such Fund and shall be the several (and not joint or joint and
several) obligation of each such Fund.
8. EXPENSE LIMITATION. If for any fiscal year of the Funds the total
expenses allocated to a Fund pursuant to paragraph 5 (including fees paid to the
Adviser and any other service provider but excluding taxes, interest,
commissions and other normal charges incident to the purchase and sale of
portfolio securities, extraordinary charges such as litigation costs, and
payments pursuant to a Fund's Rule 12b-1 Plan) exceed the most restrictive
applicable limits prescribed by any state in which shares of the Fund are then
being offered for sale to the public, the Adviser agrees to reimburse the Trust
in an amount equal to such excess, provided that the Adviser shall not be
required to reimburse a Fund for any year in an amount greater than the amount
of fees received by it with respect to management of the Fund for that year. Any
such reimbursement by the Adviser, or refund by a Fund of an excess
reimbursement, shall be paid monthly on an estimated basis.
9. NON-EXCLUSIVITY. The services of the Adviser to the Trust under this
Agreement are not to be 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 by such other activities.
10. STANDARD OF CARE. Neither the Adviser, nor any Subadviser, nor any
of their respective directors, officers, agents or employees shall be liable or
responsible to the Trust or its shareholders for any error of judgment, or any
loss arising out of any investment, or for any other
act or omission in the performance by the Adviser or a Subadviser of its duties
under this Agreement or a Subadvisory Contract, respectively, except for
liability resulting from willful misfeasance, bad faith or gross negligence on
the part of the Adviser or Subadviser, respectively, or from reckless disregard
by the Adviser or the Subadviser of its obligations and duties under this
Agreement or the Subadvisory Contract, respectively.
11. AMENDMENT. This Agreement may not be amended with respect to a
particular Fund without the affirmative votes (a) of a majority of the Directors
of the Trustees, including a majority of those Trustees who are not "interested
persons" of the Trust or the Adviser and (b) of a "majority of the outstanding
shares" of such Fund. The terms "interested person" and "vote of a majority of
the outstanding shares" shall be construed in accordance with their respective
definitions in Sections 2(a)(19) and 2(a)(42) of the 1940 Act and, with respect
to the latter term, in accordance with Rule 18f-2 under the 1940 Act.
12. TERMINATION. This Agreement may be terminated as to any Fund, at
any time, without payment of any penalty, by the Board of Trustees, or by a vote
of a majority of the outstanding shares of the Fund, upon at least 60 days'
written notice to the Adviser. This Agreement may be terminated by the Adviser
at any time upon at least 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). Unless terminated as hereinbefore provided,
this Agreement shall continue in effect with respect to a particular Fund for a
period of two years from the date hereof 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 or by a vote of a majority of
the outstanding shares of such Fund.
13. NON-LIABILITY OF TRUSTEES AND SHAREHOLDERS. The names "Xxxxxx
Insight Funds Trust" and "Trustees of Xxxxxx Insight Funds Trust" refer
respectively to the Trust created and the Trustees as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated December 6, 1995 which is xxxxxx referred to and a copy of which is
on file at the office of the Secretary of State of the Commonwealth of
Massachusetts and at the principal office of the Trust. The obligations of
"Xxxxxx Insight Funds Trust" entered into in the name or on behalf thereof by
any of the Trustees, officers, representatives or agents are not made
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, officers, representatives or agents of the Trust
personally, but bind only the Trust Property, and all persons dealing with any
class of shares of the Trust must look solely to the Trust Property belonging to
such class for the enforcement of any claims against the Trust.
14. NOTICE. Any notice, demand, change of address or other
communication to be given in connection with this Agreement shall be given in
writing and shall be given by personal delivery, by registered or certified mail
or by transmittal by facsimile or other electronic medium addressed to the
recipient as follows:
To the Adviser: Xxxxxx Trust and Savings Bank
000 X. Xxxxxx Xxxxxx Xxxxx 0X
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
To the Trust: Xxxxxx Insight Funds Trust
Telephone:
Fax:
All notices shall be conclusively deemed to have been given on the day
of actual delivery thereof and, if given by registered or certified mail, on the
fifth business day following the deposit thereof in the mail and, if given by
facsimile or other electronic medium, on the day of transmittal thereof.
15. GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Illinois and the laws of the United
States of America applicable to contracts executed and to be performed therein.
16. REFERENCES AND HEADINGS. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as "herein,"
"hereof," and "under this Agreement" shall be deemed to refer to this Agreement
or this Agreement as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken as a part
hereof or control or affect the meaning, construction or effect of this
Agreement. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
Dated: February 23, 1996
XXXXXX INSIGHT FUNDS TRUST
By /s/ Xxxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: President
ATTEST:
................................
Xxxxxxxx X. Xxxxxxxx, Secretary
XXXXXX TRUST AND SAVINGS BANK
By /s/ Xxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
ATTEST:
................................
______________________, Secretary
