Exhibit (d)(1)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made as of November 1, 2001 by and between CCM Advisors, LLC, a
limited liability company organized under the laws of the state of Delaware (the
"Adviser") and CCM Advisors Funds, a business trust organized under the laws of
the state of Delaware (the "Trust") on behalf of the series listed on Schedule A
(each a "Portfolio"):
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust issues shares of beneficial interest in each Portfolio
(the "Shares") registered under the 1940 Act pursuant to a registration
statement filed with the Securities and Exchange Commission (the "SEC") on March
20, 2001, as amended from time to time (the "Registration Statement");
WHEREAS, the Adviser is an investment adviser registered under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and has filed
notification filings under all applicable state securities laws;
WHEREAS, the Trust desires to retain the Adviser to render investment
advisory services to each Portfolio; and
WHEREAS, the Adviser is willing to provide investment advisory services to
each Portfolio, in the manner and on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of their mutual promises, the Trust, on
behalf of each Portfolio, and the Adviser agree as follows:
ARTICLE 1
Employment of Adviser
1.1 The Trust hereby employs the Adviser to act as investment adviser
for and to manage, or arrange for the management of, the investment and
reinvestment of the assets of each Portfolio, to the extent requested by
and subject to the supervision and control of, the Board of Trustees of the
Trust (the "Board") for the period and upon the terms herein set forth.
1.2 The Adviser accepts such employment and agrees during such period
at its own expense to arrange for the services to be rendered, and to
assume the obligations herein set forth for the compensation herein
provided. In connection therewith, the Adviser will retain one or more
subadvisers to render such services and to assume the obligations set forth
herein, subject to the provisions of the 1940 Act and the Advisers Act.
1.3 The Adviser shall for all purposes be deemed to be an independent
contractor, and unless otherwise expressly provided or authorized shall
have no authority to act for or represent the Trust in any way or otherwise
be deemed an agent of the Trust or a Portfolio. Notwithstanding the
foregoing, the Adviser shall, for the purposes of this agreement, have
authority to act as agent for each Portfolio, subject to supervision by the
Board.
1.4 The services of the Adviser herein provided are not to be deemed
exclusive and the Adviser shall be free to render similar services or other
services to others so long as its services hereunder shall not be impaired
thereby.
ARTICLE 2
Duties of Adviser
2.1 Investment Management Services.
(a) Subject to the general supervision of the Board, the Adviser
shall provide general, overall advice and guidance with respect to
each Portfolio and provide advice and guidance to the Board. In
discharging these duties the Adviser shall, through one or more
subadvisers engaged by it, provide a continuous investment program for
each Portfolio and determine the composition of the assets of each
Portfolio, including determination of the purchase, retention or sale
of the securities, cash and other investments for each Portfolio. In
performing these duties, the Adviser, indirectly through others
selected by the Adviser, shall:
(i) perform research and obtain and evaluate pertinent
economic, statistical, and financial data relevant to the
investment policies of each Portfolio as set forth in the
Registration Statement;
(ii) seek out and implement specific investment
opportunities, consistent with any investment strategies approved
by the Board;
(iii) take such steps as are necessary to implement any
overall investment strategies approved by the Board for each
Portfolio, including making and carrying out day-to-day decisions
to acquire or dispose of permissible investments, managing
investments and any other property of each Portfolio, and
providing or obtaining such services as may be necessary in
managing, acquiring or disposing of investments;
(iv) regularly report to the Board with respect to the
implementation of any approved overall investment strategy and
any other activities in connection with management of the assets
of each Portfolio, including furnishing, within 60 days after the
end of each calendar quarter, a statement of all purchases and
sales during the quarter and a schedule of investments and other
assets of each Portfolio as of the end of the quarter;
(v) maintain all required accounts, records, memoranda,
instructions or authorizations relating to the acquisition or
disposition of investments for each Portfolio; and
(vi) assist in determining each business day the net asset
value of the shares of each Portfolio in accordance with
applicable law; and
(b) Notwithstanding the responsibilities of the Adviser, neither
the Adviser nor its employees shall be required to evaluate the merits
of investment selections or decisions made by the subadviser or be
required to approve the selections or decisions, or to confirm their
compliance with applicable investment policies and restrictions; these
responsibilities being within the duties of the subadviser(s);
(c) The Adviser shall consult with the Board and furnish to the
Board recommendations with respect to an overall investment strategy
for each Portfolio for approval, modification, or rejection by the
Board;
(d) The Adviser's and any subadviser's services shall be subject
always to the control and supervision of the Board, the restrictions
of the Declaration of Trust and Bylaws of the Trust, as amended from
time to time, the provisions of the 1940 Act, the statements relating
to each Portfolio's investment objective or objectives, investment
policies and investment restrictions as set forth in the then-current
Registration Statement, and any applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Code"). The Trust has furnished
or will furnish the Adviser with copies of the Registration Statement,
Declaration of Trust, and Bylaws as currently in effect and agrees
during the continuance of this agreement to furnish the Adviser with
copies of any amendments or supplements thereto before or at the time
the amendments or supplements become effective. The Adviser will be
entitled to rely on all documents furnished by the Trust.
(e) The Adviser represents that it shall make every effort to
ensure that each Portfolio continuously qualifies as a Regulated
Investment Company under Subchapter M of the Code or any successor
provision. Except as instructed by the Board, the Adviser shall also
make decisions for each Portfolio as to the manner in which voting
rights, rights to consent to corporate action and any other rights
pertaining to each Portfolio's portfolio securities shall be
exercised. Should the Board at any time make any determination as to
investment policy and notify the Adviser thereof, the Adviser shall be
bound by such determination for the period, if any, specified in such
notice or until similarly notified that such determination has been
revoked.
(f) In connection with the acquisition or disposition of
securities described in Section 2.1(a) (iii), the Adviser and
subadviser(s) may place orders for the purchase or sale of portfolio
investments for the account of each Portfolio with brokers or dealers
selected by it and, to that end, the Adviser and subadviser(s) are
authorized as agents of each Portfolio to give instructions to the
custodian(s) of each Portfolio as to deliveries of securities and
payments of cash for the account of each Portfolio. In connection with
the selection of brokers or dealers and the placing of purchase and
sale orders with respect to assets of each Portfolio, the Adviser and
subadviser(s) are directed at all times to seek to obtain the best
combination of net price and execution under the circumstances within
the policy guidelines set forth in the current Registration Statement.
Subject to this requirement and the provisions of the Advisers Act,
the 1940 Act, and other applicable provisions of law, the Adviser and
subadviser(s) may select brokers or dealers with which it, any
subadviser or the Portfolio is affiliated.
(g) In addition to seeking the best combination of net price and
execution under the circumstances, the Adviser and subadviser(s) may
also take into consideration research and statistical information and
wire and other quotation services provided by brokers and dealers to
the Adviser and subadviser(s). The Adviser and subadviser(s) are also
authorized to effect individual securities transactions at commission
rates in excess of the minimum commission rates available, if the
Adviser and subadviser(s) determine in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms
of either that particular transaction or Adviser's overall
responsibilities with respect to each Portfolio. The policies with
respect to brokerage allocation, determined from time to time by the
Board are those disclosed in the Registration Statement. 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 and subadviser(s) periodically will evaluate the statistical
data, research and other investment services provided to it by brokers
and dealers. Such services may be used by the Adviser or a subadviser
in connection with the performance of its obligations under this
agreement or in connection with other advisory or investment
operations including using such information in managing its own
accounts.
(h) Nothing in this agreement shall preclude the aggregation of
orders for sale or purchase of securities or other investments by two
or more series of the Trust or by the Trust and other accounts
(collectively, "Advisory Clients") managed by the Adviser or
subadviser, provided that: (i) the Adviser or a subadviser's actions
with respect to the aggregation of orders for multiple Advisory
Clients, including each Portfolio, are consistent with the
then-current positions in this regard taken by the Securities and
Exchange Commission or its staff through releases, "no-action"
letters, or otherwise; and (ii) the Adviser's policies with respect to
the aggregation of orders for multiple Advisory Clients have been
previously submitted and approved by the Board.
ARTICLE 3
Allocation of Charges and Expenses
3.1 Charges and Expenses Allocated to the Adviser.
The Adviser shall provide all executive, administrative, clerical and
other personnel necessary to operate each Portfolio and shall pay the
salaries and other costs of employing all of these persons. The Adviser
shall also furnish each Portfolio with office space, facilities, and
equipment and shall pay the day to day expenses related to the operation
and maintenance of such office space, facilities and equipment. All
expenses incurred in the organization of each Portfolio, including legal
and accounting expenses and certain costs of registering securities of each
Portfolio under federal securities law and qualifying for sale under state
securities laws, shall also be paid by the Adviser. The Adviser shall
assume and pay all expenses incurred by it in connection with managing the
assets of each Portfolio, including paying the subadviser(s).
3.2 Charges and Expenses Allocated to each Portfolio.
(a) Each Portfolio shall be responsible for payment of all
expenses it may incur in its operation and all of its general
administrative expenses except those expressly assumed by the Adviser
as described in Section 3.1 above. These include (by way of
description and not of limitation), any share redemption expenses,
expenses of portfolio transactions, shareholder servicing costs,
pricing costs, interest on borrowings by the Portfolio, charges of the
custodians and transfer agent, if any, cost of auditing services, all
taxes and fees, investment advisory fees (other than subadvisory
fees), certain insurance premiums, investor services (including
allocable personnel and telephone expenses), the cost of paying
dividends and capital gains distributions, and any extraordinary
expenses, including litigation costs in legal actions involving the
Portfolio, or costs related to indemnification of directors, officers
and employees of the Trust.
(b) Each Portfolio shall be free to retain at its expense other
persons to furnish it with any services whatsoever, including, without
limitation, statistical, factual or technical information or advice.
ARTICLE 4
Compensation of the Adviser
4.1 For the services to be rendered, the facilities to be furnished
and the payments to be made by the Adviser, as provided herein, each
Portfolio shall pay to the Adviser for each month of the Portfolio's fiscal
year on the last day of each such month a fee based upon the average daily
net assets of the Portfolio, as determined pursuant to the Portfolio's
Registration Statement, at specified on Schedule A of this agreement.
4.2 For the month and year in which this agreement becomes effective
or terminates there shall be an appropriate proration on the basis of the
number of days that the agreement is in effect during the month and year
respectively.
4.3 If the net asset value is not required to be determined on any
particular business day, then for the purpose of the foregoing
computations, the net asset value of a share as last determined shall be
deemed to be the net asset value of a share as of the close of business on
that day.
4.4 In connection with purchases or sales of portfolio securities for
the account of each Portfolio, neither the Adviser, any subadviser, nor any
officer, director, shareholder or other affiliate of the Adviser or any
subadviser nor any officer, trustee, shareholder or other affiliate of the
Trust shall: (i) act as agent and accept any compensation other than its
compensation provided for in this agreement, except in the course of such
person's business as an underwriter or broker; or (ii) act as broker and
accept any commission, fee, or other remuneration in excess of the limits
prescribed in the 1940 Act and the rules promulgated thereunder.
4.5 The Adviser agrees that in all matters relating to the management
of the investment of the assets of the Portfolio, it will act in conformity
with the Registration Statement, Declaration of Trust, and Bylaws of the
Trust then in effect.
ARTICLE 5
Limitations of Liability
5.1 The Adviser shall give each Portfolio the benefit of the Adviser's
best judgment and efforts in rendering services under this agreement;
provided, that the Adviser shall not be liable for any error of judgment or
import of law, or for any loss suffered by the Trust in connection with the
matters to which this agreement relates, except loss resulting from: (i)
willful misfeasance, bad faith or gross negligence on the part of the
Adviser in the performance of its obligations and duties under this
agreement; (ii) its reckless disregard of its obligations and duties under
this agreement; or (iii) a breach of Section 2.1(e) of this agreement.
ARTICLE 6
Books and Records
6.1 The Adviser hereby undertakes and agrees to maintain, in the form
and for the period required, all records relating to each Portfolio's
investments that are required to be maintained by the Portfolio pursuant to
applicable law.
6.2 The Adviser agrees that all books and records which it maintains
for each Portfolio are the property of the Trust and further agrees to
surrender promptly to the Trust any such books, records or information upon
the Trust's request. All such books and records shall be made available,
within five business days of a written request, to the Trust's accountants
or auditors during regular business hours at the Adviser's offices. The
Trust or its authorized representative shall have the right to copy any
records in the possession of the Adviser which pertain to the Trust. Such
books, records, information or reports shall be made available to properly
authorized government representatives consistent with state and federal law
and/or regulations. In the event of the termination of this agreement, all
such books, records or other information shall be returned to the Trust
free from any claim or assertion of rights by the Adviser.
6.3 The Adviser further agrees that it will not disclose or use any
records or information obtained pursuant to this agreement in any manner
whatsoever except as authorized in this agreement and that it will keep
confidential any information obtained pursuant to this agreement and
disclose such information only if the Trust has authorized such disclosure,
or if such disclosure is required by federal or state regulatory
authorities.
ARTICLE 7
Duration and Termination of this Agreement
7.1 This agreement shall not become effective unless and until the
later of the time at which it is approved by the Board, including a
majority of trustees who are not parties to this agreement or interested
persons of any such party to this agreement, or the time at which it is
approved by a majority of each Portfolio's outstanding voting securities as
required by the 1940 Act. This agreement shall come into full force and
effect on the later of such two dates. The agreement shall continue in
effect for two years and shall thereafter continue in effect from year to
year so long as such continuance is specifically approved at least annually
by: (i) the Board, or by the vote of a majority of each Portfolio's
outstanding voting securities; and (ii) a majority of those trustees 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.
7.2 Termination.
(a) This agreement may be terminated at any time, without
penalty, by vote of the Board or by vote of the holders of a majority
of a Portfolio's outstanding voting securities, or by the Adviser, on
sixty (60) days' written notice to the other party.
(b) This agreement may be terminated at any time without the
payment of any penalty by vote of the Board in the event that it shall
have been established by a court of competent jurisdiction that the
Adviser or any officer or director of the Adviser has taken any action
which results in a breach of the covenants of the Adviser set forth
herein.
(c) This agreement shall automatically terminate in the event of
its assignment.
ARTICLE 8
Amendments to this Agreement
8.1 This agreement may be amended by the parties only if such
amendment is specifically approved by: (i) the vote of a majority of each
Portfolio's outstanding voting securities; and (ii) a majority of those
trustees 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.
8.2 Notwithstanding anything herein to the contrary, this agreement
may be amended by the parties without the vote or consent of shareholders
of each Portfolio to supply any omission, to cure, correct or supplement
any ambiguous, defective or inconsistent provision hereof, or if they deem
necessary to conform this Agreement to the requirements of applicable
federal laws or regulations, but neither the Trust nor the Adviser shall be
liable for failing to do so.
ARTICLE 9
Notices
9.1 Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify
in writing to the other party.
If to the Trust:
CCM Advisors Funds
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
If to the Adviser:
CCM Advisors, LLC.
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
ARTICLE 10
Miscellaneous Provisions
10.1 Other Relationships. It is understood that the officers,
trustees, agents, shareholders and other affiliates of the Trust are or may
be interested in the Adviser as officers, directors, agents, shareholders,
affiliates or otherwise, and that the officers, directors, shareholders,
agents and other affiliates of the Adviser may be interested in the Trust
otherwise than as a shareholder.
10.2 Definitions of Certain Terms. The terms "assignment," "affiliated
person" and "interested person", when used in this agreement, shall have
the respective meanings specified in the 1940 Act. The term "majority of
the outstanding voting securities" means the lesser of: (a) 67% or more of
the votes attributable to Shares of the Portfolio or the Trust, as
appropriate, present at a meeting if the holders of more than 50% of such
votes are present or represented by proxy; or (b) more than 50% of the
votes attributable to Shares of the Portfolio or the Trust, as appropriate.
10.3 Applicable Law.
(a) This agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of Illinois without
regard to conflicts of law principles or precedents.
(b) This agreement shall be subject to the provisions of the 1933
Act, the 1940 Act and the Securities Exchange Act of 1934, and the
rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may
grant and the terms hereof shall be interpreted and construed in
accordance therewith.
10.4 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.
10.5 Captions. The captions in this agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
10.6 Counterparts. This agreement may be executed simultaneously in
multiple counterparts, each of which taken together shall constitute one
and the same instrument.
10.7 Cooperation with Authorities. Each party hereto shall cooperate
with the other party and all appropriate governmental authorities
(including without limitation the SEC) and shall permit such authorities
reasonable access to its books and records in connection with any
investigation or inquiry relating to this agreement or the transactions
contemplated hereby.
10.8 Cumulative Rights. The rights, remedies and obligations contained
in this agreement are cumulative and are in addition to any and all rights,
remedies and obligations, at law or in equity, which the parties hereto are
entitled to under state and federal laws.
10.9 Compensation of Officers, Trustees and Employees. No trustee,
officer or employee of the Trust shall receive from the Trust any salary or
other compensation as a trustee, officer or employee of the Trust while at
the same time holding a position as a director, officer, partner, member or
employee of the Adviser. This paragraph shall not apply to consultants and
other persons who are not regular members of the Adviser's staff.
10.10 Non-Liability of Trustees and Shareholders. A copy of the
declaration of trust of the Trust is on file with the Secretary of State of
the State of Delaware, and notice is hereby given that this instrument is
executed on behalf of the Trust by officers of the Trust as officers and
not individually. Any obligation of the Trust hereunder shall be binding
only upon the assets of the Trust (or applicable series thereof) and shall
not be binding upon any Trustee, officer, employee, agent or shareholder of
the Trust. Neither the authorization of any action by the Trustees or
shareholders of the Trust nor the execution of this agreement on behalf of
the trust shall impose any liability upon any Trustee, officer or
shareholder of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed in their names and on their behalf by their duly authorized
officers all on the day and year first above written.
CCM ADVISORS, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
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Title:
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CCM ADVISORS FUNDS
By: /s/ Xxxxxxx X. Xxxxxxx
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Title:
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Schedule A
Limited Maturity Fixed Income Master Portfolio
Full Maturity Fixed Income Master Portfolio
Diversified Equity Master Portfolio
Balanced Master Portfolio
