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EXHIBIT 5
ADVISORY AGREEMENT
AS AMENDED FEBRUARY 7, 1992
AMENDED AGREEMENT made this 7th day of February 1992 between XXXXXXXX,
XXXXX & XXXXX FUNDS, INC., a Wisconsin corporation (the "Corporation"), and
XXXXXXXX, XXXXX & XXXXX, INC., a Wisconsin corporation (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Corporation is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Corporation is authorized to issue shares of its Common
Stock, $.001 par value per share (the "Shares") in one or more series; and
WHEREAS, the Corporation desires to retain the Adviser to render
investment advisory and administrative services to the Fund and the Adviser is
willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Adviser. The Corporation hereby appoints the Adviser
to act as investment adviser and to provide administrative services with respect
to the Series of Shares described on Exhibit A hereto (individually, a "Series"
and collectively, the "Fund") for the periods 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. Additional Series may be added
to this Agreement by amendment to Exhibit A and without the necessity for
reapproval of this Agreement by any Series already covered by this Agreement.
2. Delivery of Documents. The Fund has delivered (or will deliver as
soon as is possible) to the Adviser copies of each of the following documents:
(a) Amended and Restated Articles of Incorporation of the Corporation
as filed with the Secretary of State of Wisconsin and currently in effect
(such Amended and Restated Articles of Incorporation, as presently in
effect and as amended and/or restated from time to time, are herein called
the "Articles");
(b) By-Laws of the Corporation (such By-Laws, as presently in effect
and as amended from time to time, are herein called the "By-Laws");
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(c) Certified resolutions of the Board of Directors of the Corporation
approving the terms of this Agreement;
(d) Custodian Agreement With Bank between the Corporation and First
Wisconsin Trust Company (such Agreement, as presently in effect and as
amended and/or superseded from time to time, is herein called the
"Custodian Agreement");
(e) Shareholder Servicing Agent Agreement between the Corporation and
First Wisconsin Trust Company (such Agreement, as presently in effect and
as amended and/or superseded from time to time, is herein called the
"Shareholder Servicing Agreement");
(f) Accounting Services Agreement between the Corporation and the
Adviser (such Agreement, as presently in effect and as amended and/or
superseded from time to time, is herein called the "Accounting Services
Agreement"),
(g) Prospectus and Statement of Additional Information of the Fund
(such Prospectus and Statement of Additional Information, as presently in
effect and as amended, supplemented and/or superseded from time to time,
are herein called the "Prospectus" and "Additional Statement",
respectively);
(h) Registration Statement of the Fund under the Securities Act of
1933, as amended (the "1933 Act") and the 1940 Act on Form N-1A as filed
with the (the "Commission") on or about June 10, 1986, together with all
amendments to the date hereof (such Registration Statement, as presently in
effect and as amended from time to time, is herein called the "Registration
Statement").
The Fund agrees to promptly furnish the Adviser from time to time with
copies of all amendments of or supplements to or otherwise current versions of
any of the foregoing documents not heretofore furnished.
3. Duties of Adviser.
(a) Subject to the general supervision of the Board of Directors of
the Corporation, the Adviser shall manage the investment operations of the
Fund and the composition of the Fund's assets, including the purchase,
retention and disposition thereof. In this regard, the Adviser
(i) shall provide supervision of the Fund's assets, furnish a
continuous investment program for the Fund, determine from time to
time what investments
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or securities will be purchased, retained or sold by the Fund, and
what portion of the assets will be invested or held uninvested as
cash;
(ii) shall place orders pursuant to its determinations either
directly with the issuer or with any broker and/or dealer who deals in
the securities in which the Fund is active. In placing orders, the
Adviser shall be entitled to rely upon the provisions of Section 28(e)
of the Securities Exchange Act of 1934, as amended;
(iii) may, on occasions when it deems the purchase or sale of a
security to be in the best interests of the Fund as well as its other
customers (including any other investment company or advisory account
for which the Adviser acts as adviser), aggregate, to the extent
permitted by applicable laws and regulations, the securities to be
sold or purchased in order to obtain a more favorable net price or
execution. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be
made by the Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Fund
and to such other customers.
(b) In addition, the Adviser shall, subject to the general
supervision of the Board of Directors of the Corporation, provide for the
administration of all other affairs of the Fund. In this regard, the
Adviser
(i) giving due recognition to the fact that certain of such
operations are performed by others pursuant to the Custodian Agreement
and the Shareholder Servicing Agreement (and the Accounting Services
Agreement to the extent that a person other than the Adviser is
serving as the Fund's accounting services agent), shall provide
supervision of all aspects of the Fund's operations not referred to in
paragraph 3(a) above;
(ii) shall, to the extent not provided pursuant to the Custodian
Agreement, the Shareholder Servicing Agreement or the Accounting
Services Agreement, provide the Fund with personnel to perform such
executive, administrative and clerical services as are reasonably
necessary to provide effective administration of the Fund;
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(iii) shall, to the extent not provided pursuant to the Custodian
Agreement, the Shareholder Servicing Agreement or the Accounting
Services Agreement, arrange for (A) the preparation for the Fund of
all required tax returns, (B) the preparation and submission of
reports to existing Shareholders, and (C) the periodic updating of the
Prospectus and Additional Statement and the preparation of reports
filed with the Commission and other regulatory authorities;
(iv) shall, to the extent not provided pursuant to the Custodian
Agreement, the Shareholder Servicing Agreement or the Accounting
Services Agreement, provide the Fund with adequate office space and
all necessary office equipment and services including telephone
service, heat, utilities, stationery supplies and similar items, in
Madison, Wisconsin.
(c) The Adviser, in the performance of its duties hereunder, shall act
in conformity with the Articles, ByLaws, Prospectus, Additional Statement
and Registration Statement and with the instructions and directions of the
Board of Directors of the Corporation, and will comply with and conform to
the requirements of the 1940 Act, the Investment Advisers Act of 1940 and
all other applicable federal and state laws, regulations and rulings.
(d) The Adviser shall render to the Board of Directors of the
Corporation such periodic and special reports as the Board may reasonably
request.
(e) The services of the Adviser hereunder are not 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 thereby.
(f) Subject to Section 36 of the 1940 Act, the Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the matters to which this Agreement relates,
except liability to the Fund or the Shareholders to which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
4. Expenses.
(a) During the term of this Agreement, the Adviser will pay all costs
incurred by it in connection with the performance of its duties under
paragraph 3 hereof, other
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than the cost (including taxes and brokerage commissions, if any) of
securities purchased for the Fund and the cost of the preparations,
submissions, updatings and filings referred to in paragraph 3(b)(iii).
(b) If, in any fiscal year, the sum of the expenses of a Series
(including the fee payable pursuant to paragraph 5 hereof, but excluding
taxes, interest, brokerage commissions relating to the purchase or sale of
portfolio securities, and, where permitted, extraordinary expenses such as
for litigation) exceeds the expense limitations applicable to the Series
imposed by state securities administrators, as such limitations may be
lowered or raised from time to time, the Adviser shall reimburse such
Series in the amount of such excess to the extent required by such expense
limitations.
(c) In addition to the foregoing, the Adviser may from time to time at
its option (but shall be under no obligation to) voluntarily assume or
undertake to reimburse a Series for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Adviser. Any such
voluntary assumption or undertaking may be discontinued or modified at any
time by the Adviser.
5. Compensation.
(a) For the services provided and the expenses assumed by the Adviser
pursuant to this Agreement, each Series will pay the Adviser, and the
Adviser agrees to accept as full compensation for all services rendered by
it hereunder, an annual management fee as shown on Exhibit A attached
hereto.
(b) The foregoing fee will be computed based on the value of net
assets on each day and will be paid to the Adviser monthly.
6. Books and Records. The Adviser shall maintain all of the Fund's
records (other than those maintained pursuant to the Custodian Agreement, the
Shareholder Servicing Agreement or the Accounting Services Agreement). The
Adviser agrees that all records which it maintains for the Fund are the
property of the Fund and it will surrender promptly to the Fund any of such
records upon the Fund's request. The Adviser further agrees to preserve for
the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act any
such records as are required to be maintained by Rule 31a-1 of the Commission
under the 1940 Act.
7. Indemnification.
(a) The Fund hereby agrees to indemnify and hold harmless the Adviser,
its directors, officers and employees
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and each person, if any, who controls the Adviser (collectively, the
"Indemnified Parties") against any and all losses, claims, damages or
liabilities, joint or several, to which any such Indemnified Party may
become subject under the 1933 Act, the Securities Exchange Act of 1934 (as
amended), the 1940 Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon
(i) any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission to state a material
fact required to be stated or necessary to make the statements made
not misleading in (x) the Prospectus, Additional Statement or the
Registration Statement, (y) any advertisement or sales literature
authorized by the Fund for use in the offer and sale of the Shares, or
(z) any application or other document filed in connection with the
qualification of the Fund or its Shares under the Blue Sky or
securities laws of any jurisdiction, except insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission either pertaining to a failure to
disclose a breach of the Adviser's duties in connection with this
Agreement or the Accounting Services Agreement or made in reliance
upon and in conformity with information furnished to the Fund by or on
behalf of the Adviser for use in connection with any document referred
to in clauses (x), (y), or (z), or
(ii) subject in each case to clause (i) above, the Adviser acting
hereunder;
and the Fund will reimburse each Indemnified Party for any legal or other
expenses incurred by such Indemnified Party in connection with
investigating or defending any such loss, claim, damages, liability or
action; provided that any liability hereunder which relates to a particular
Series shall be satisfied solely from the assets of that Series.
(b) If the indemnification provided for in paragraph 7(a) is available
in accordance with the terms of such paragraph but is for any reason held
by a court to be unavailable from the Fund, then the Fund shall contribute
to the aggregate amount paid or payable by the Fund and the Indemnified
Parties as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect
(i) the relative benefits received by the Fund and such Indemnified Parties
in connection with the operations of the Fund,
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(ii) the relative fault of the Fund and such Indemnified Parties, and (iii)
any other relevant equitable considerations. The Fund and the Adviser
agree that it would not be just and equitable if contribution pursuant to
this subparagraph (b) were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable
considerations referred to above in this subparagraph (b). The aggregate
amount paid or payable as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subparagraph (b) shall be deemed to include any legal or other expenses
incurred by the Fund and the Indemnified Parties in connection with
investigating or defending any such loss, claim, damage, liability or
action. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
(c) It is understood, however, that nothing in this paragraph 7 shall
protect any Indemnified Party against, or entitle any Indemnified Party to
indemnification against or contribution with respect to, any liability to
the Fund or its Shareholders to which such Indemnified Party is subject, by
reason of its willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of any reckless disregard of its
obligations and duties, under this Agreement, or otherwise to an extent or
in a manner inconsistent with Section 17(i) of the 1940 Act.
8. Duration and Termination. This Agreement originally became effective
as to the Xxxxxxxx, Xxxxx & Xxxxx Balanced Fund on March 13, 1987. This
Agreement shall become effective for the Xxxxxxxx, Xxxxx & Xxxxx Stock Fund and
the Xxxxxxxx, Xxxxx & Xxxxx Bond Fund and for any additional Series initiated
after the date of this Agreement, on the effective date of each such additional
Series' Registration statement with the U.S. Securities and Exchange Commission,
and shall, unless terminated as hereinafter provided, continue in effect for 18
months from effectiveness of this Agreement as to such series, and thereafter
shall continue automatically for periods of one year so long as each such latter
continuance is approved at least annually (a) by the vote of a majority of the
Directors of the Corporation who are not parties to this Agreement or interested
persons (as defined in the 0000 Xxx) 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 Corporation or by vote of a majority of the outstanding
Shares of the Series (as defined with respect to voting securities in the 1940
Act); provided, however, that (y) the continuance of this Agreement until 18
months from the effectiveness of this Agreement as to such series is, in
addition to the requirements set forth above, subject to the
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approval of this Agreement by a majority of the outstanding Shares (as so
defined) of the additional Series on or before the first anniversary of the
date of the effectiveness of the first Registration Statement including such
Series, and (z) this Agreement may be terminated as to any Series at any time,
without the payment of any penalty, by the Board of Directors of the
Corporation or by vote of a majority of the outstanding Shares of the Series
(as so defined) on 60 days' written notice to the Adviser, or by the Adviser at
any time, without the payment of any penalty, on 60 days' written notice to
the Corporation. This Agreement will automatically and immediately terminate
in the event of its assignment (as defined in the 1940 Act).
9. Name of the Fund. The Adviser agrees that the words "Xxxxxxxx, Xxxxx &
Xxxxx" may be used in the name of the Corporation and any Series and that such
name, any related logos and any service marks containing the words "Xxxxxxxx,
Xxxxx & Xxxxx" may be used in connection with their business only for so long
as this Agreement (including any continuance or amendment hereof) remains in
effect and that such use shall be royalty free. At such time as this Agreement
shall no longer be in effect, the Fund will (to the extent it lawfully can)
cease such use. The Fund acknowledges that it has no rights to the name
"Xxxxxxxx, Xxxxx & Xxxxx," such logos or service marks other than those granted
in this paragraph and that the Adviser reserves to itself the right to grant
the nonexclusive right to use the words "Xxxxxxxx, Xxxxx & Xxxxx," such logos
or service marks to any other person, including, but not limited to, another
investment company.
10. Status of Adviser as Independent Contractor. The Adviser shall for
all purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Board of Directors of
the Corporation from time to time, have no authority to act for or represent
the Corporation in any way or otherwise be deemed an agent of the Corporation.
11. Amendment of Aqreement. This Agreement may be amended by mutual
consent, but the consent of any Series must be approved (a) by vote of a
majority of those Directors of the Corporation who are not parties to this
Agreement or interested persons (as defined in the 0000 Xxx) 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 Shares of such Series (as
defined with respect to voting securities in the 1940 Act).
12. 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. If any
provision of this Agreement shall
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be held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement shall
be construed in accordance with applicable federal law and the laws of the State
of Wisconsin and shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, subject to paragraph 8 hereof.
Anything herein to the contrary notwithstanding, this Agreement shall not be
construed to require, or to impose any duty upon, either of the parties to do
anything in violation of any applicable laws or regulations. This Agreement
supersedes any prior agreement between the parties with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above
written.
ATTEST: XXXXXXXX, XXXXX & XXXXX FUNDS, INC.
/s/ Xxxxxx X. Xxxxx By /s/ Xxxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Secretary Xxxxxxx X. Xxxxx, President
ATTEST: XXXXXXXX, XXXXX & XXXXX, INC.
/s/ Xxxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxx, Secretary Xxxx X. Xxxxxxxx, President
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EXHIBIT A TO ADVISORY AGREEMENT
BETWEEN XXXXXXXX, XXXXX & XXXXX FUNDS, INC.
AND
XXXXXXXX, XXXXX & XXXXX, INC.
1. The Xxxxxxxx, Xxxxx & Xxxxx Growth Fund.
The management fee of this Series, calculated in accordance with
Paragraph 5 of the Advisory Agreement, shall be at the annual rate of
1.00% of the first $50 million of average daily net assets of the Series,
and 0.90 of 1% of average daily net assets in excess of $50 million.
2. The Xxxxxxxx, Xxxxx & Xxxxx Balanced Fund.
The management fee for this Series, calculated in accordance with
Paragraph 5 of the Advisory Agreement, shall be at the annual rate of
0.85 of 1% of the first $50 million of average daily net assets of the
Series, and 0.80 of 1% of average daily net assets in excess of $50
million.
3. The Xxxxxxxx, Xxxxx & Xxxxx Bond Fund.
The management fee for this Series, calculated in accordance with
Paragraph 5 of the Advisory Agreement, shall be at the annual rate of
0.65 of 1% of the first $50 million of average daily net assets of the
Series, and 0.60 of 1% of average daily net assets in excess of $50
million.
