INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
XXXX XXXXX VALUE TRUST, INC.
AGREEMENT made this 1st day of August, 2000 by and between Xxxx Xxxxx
Funds Management, Inc. ("Adviser"), a Maryland corporation, and Xxxx Xxxxx Value
Trust, Inc. ("Fund"), a Maryland corporation.
WHEREAS, the Adviser is an investment adviser registered under the
Investment Advisers Act of 1940, as amended, and the Fund is an open-end,
diversified management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund wishes to retain the Adviser to provide it with
certain investment advisory, management, and administrative services; and
WHEREAS, the Adviser is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. Appointment. The Fund hereby appoints the Adviser as manager and
investment adviser for the Fund for the period and on the terms set forth in
this Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
2. Delivery of Documents. The Fund has furnished the Adviser with
copies properly certified or authenticated of each of the following:
(a) The Fund's Articles of Incorporation, as filed with
the State Department of Assessments and Taxation of
the State of Maryland and all amendments thereto;
(b) The Fund's By-Laws and all amendments thereto;
(c) The Fund's currently effective Registration Statement
on Form N-1A under the Securities Act of 1933, as
amended, and the 1940 Act, as filed with the
Securities and Exchange Commission, including all
exhibits thereto, relating to shares of common stock
of the Fund, and all amendments thereto;
(d) The Fund's most recent prospectus(es); and
(e) The Fund's most recent statement(s) of additional
information.
The Fund will furnish the Adviser from time to time with copies of all
amendments of or supplements to the foregoing.
3. Investment Advisory Services. (a) Subject to the supervision of the
Fund's Board of Directors, the Adviser shall regularly provide the Fund with
investment research, advice, management and supervision and shall furnish a
continuous investment program for the Fund's portfolio of securities consistent
with the Fund's investment objective, policies and limitations as stated in the
Fund's current Prospectus and Statement of Additional Information. The Adviser
shall determine from time to time what securities will be purchased, retained or
sold by the Fund, and shall implement those decisions, all subject to the
provisions of the Fund's Articles of Incorporation and By-Laws, the 1940 Act,
the applicable rules and regulations of the Securities and Exchange Commission
("SEC") and other applicable federal and state law, as well as the investment
objective, policies, and limitations of the Fund. The Adviser shall also provide
such advice and recommendations with respect to other aspects of the business
and affairs of the Fund, and shall perform such other functions of management
and supervision as may be requested by the Fund and agreed to by the Adviser.
(b) The Fund has authorized any entity or person associated with the
Adviser which is a member of a national securities exchange to effect any
transaction on the exchange for the account of the Fund which is permitted by
Section 11(a) of the Securities Exchange Act of 1934 or Rule 11a2-2(T)
thereunder, and the Fund hereby consents to the retention by such person
associated with the Adviser of compensation for such transactions, including
compensation in accordance with Rule 11a2-2(T)(a)(2)(iv).
(c) The Adviser, at its expense, shall supply the Board of Directors
and officers of the Fund with all statistical information and reports reasonably
required by them and reasonably available to the Adviser and shall furnish the
Fund with office facilities, including space, furniture, and equipment and all
personnel reasonably necessary for the operation of the Fund. The Adviser shall
assume all organizational expenses of the Fund. The Adviser shall maintain all
books and records with respect to the Fund's securities transactions and keep
the Fund's books of account in accordance with all applicable federal and state
laws and regulations. The Adviser shall authorize and permit any of its
directors, officers and employees, who may be elected as directors or officers
of the Fund, to serve in the capacities in which they are elected.
(d) The Adviser may enter into contracts with an investment sub-adviser
or a sub-administrator in which the Adviser delegates to such investment
sub-adviser or sub-administrator any or all of its duties specified in Paragraph
3 above, provided that such contracts impose on the investment sub-adviser or
sub-administrator bound thereby all duties and conditions to which the Adviser
is subject hereunder, and further provided that such contracts meet all
requirements of the 1940 Act and the rules thereunder.
4. Expenses. (a) Other than as herein specifically indicated, the
Adviser shall not be responsible for the expenses of the Fund. Specifically, the
Adviser will not be responsible, except to the extent of the reasonable
compensation of employees of the Fund whose services may be used by the Adviser
hereunder, for any of the following expenses of the Fund, which expenses shall
be borne by the Fund: interest, taxes, governmental fees; fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; the cost (including brokerage commissions or
charges, if any) of securities purchased or sold by the Fund and any losses in
connection therewith; fees of custodians, transfer agents, registrars or other
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agents; legal expenses; expense of preparing share certificates; expenses
relating to the redemption or repurchase of the Fund's shares; expenses of
registering and qualifying the Fund's shares for sale under applicable federal
and state law; expenses of preparing, setting in print, printing and
distributing prospectuses, reports, notices and dividends to the Fund's
shareholders; costs of stationery; costs of stockholders and other meetings of
the Fund; travel expenses of officers, directors and employees of the Fund, if
any; and the Fund's pro rata portion of premiums on any fidelity bond and other
insurance covering the Fund and its officers and directors.
(b) No director, officer or employee of the Fund shall receive from the
Fund any salary or other compensation as such director, officer or employee
while he or she is at the same time a director, officer or employee of the
Adviser or any affiliated company of the Adviser. This paragraph shall not apply
to directors, executive committee members, consultants and other persons who are
not regular members of the Adviser's or any affiliated company's staff.
5. Services Not Exclusive. The Adviser's services hereunder are not
deemed to be exclusive, and the Adviser shall be free to render similar services
to others. It is understood that persons employed by the Adviser to assist in
the performance of its duties hereunder might not devote their full time to such
service. Nothing herein contained shall be deemed to limit or restrict the right
of the Adviser or any affiliate of the Adviser to engage in and devote time and
attention to other business or to render services of whatever kind or nature.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all books and records which
it maintains for the Fund are property of the Fund and further agrees to
surrender promptly to the Fund or its agents any of such records upon the Fund's
request. The Adviser further agrees to preserve for the period prescribed by
Rule 31a-2 under the 1940 Act, any such records required to be maintained by
Rule 31a-1 under the 1940 Act.
7. Compensation. For the services which the Adviser will render to the
Fund under this Agreement, the Fund will pay the Adviser a fee, computed daily
and paid monthly, at the annual rate of the Fund's average daily net assets that
is set forth in Appendix A to this Agreement, reduced by the amount borne by the
Fund for all auditing and accounting expenses and for the fees (but not the
expenses) of the Fund's independent directors. If this Agreement is terminated
as of any date not the last day of a calendar month, a final fee shall be paid
promptly after the date of termination, shall be based on the average daily net
assets of the Fund in that period from the beginning of such month to such date
of termination, shall be prorated by the ratio that the number of business days
in such period bears to the number of business days in such month, and shall be
reduced by the auditing and accounting expenses and directors' fees as described
in the first sentence of this paragraph. The average daily net assets of the
Fund shall in all cases be based only on business days and be computed as of the
time of the regular close of business of the New York Stock Exchange, or such
other time as may be determined by the Board of Directors of the Fund. Each such
payment shall be accompanied by a report of the Fund prepared either by the Fund
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or by a reputable firm of independent accountants which shall show the amount
properly payable to the Adviser under this Agreement and the detailed
computation thereof.
8. Limitation of Liability. The Adviser assumes no responsibility under
this Agreement other than to render the services called for hereunder, in good
faith, and shall not be responsible for any action of the Board of Directors of
the Fund in following or declining to follow any advice or recommendations of
the Adviser; provided, however, that nothing in this Agreement shall protect the
Adviser against any liability to the Fund or its shareholders for a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties or from reckless disregard by it of its obligations or
duties under this Agreement.
9. Definitions. As used in this Agreement, the terms "securities" and
"net assets" shall have the meanings ascribed to them in the Articles of
Incorporation of the Fund; and the terms "assignment," "interested person," and
"majority of the outstanding voting securities" shall have the meanings given to
them by Section 2(a) of the 1940 Act, subject to such exemptions as may be
granted by the SEC by any rule, regulation or order.
10. Duration and Termination. This Agreement will become effective
August 1, 2000. If not earlier terminated, this Agreement shall continue in
effect for successive annual periods, provided that such continuance is
specifically approved at least annually (i) by the Fund's Board of Directors or
(ii) by a vote of a majority of the outstanding voting securities of the Fund,
provided that in either event the continuance is also approved by a majority of
the Fund's Directors who are not interested persons of the Fund or of any party
to this Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty, by vote
of the Fund's Board of Directors, by vote of a majority of the outstanding
voting securities of the Fund, or by the Adviser, on not less than 60 days'
notice to the Fund and/or the other party(ies) and will be terminated
immediately upon the mutual written consent of the Adviser and the Fund. This
Agreement will automatically and immediately terminate in the event of its
assignment by the Adviser and shall not be assignable by the Fund without the
consent of the Adviser.
11. Use of "Xxxx Xxxxx" Name. In the event this Agreement is terminated
by either party or upon written notice from the Adviser at any time, the Fund
hereby agrees that it will eliminate from its name any reference to the name of
"Xxxx Xxxxx." The Fund shall have the non-exclusive use of the name "Xxxx Xxxxx"
in whole or in part so long as this Agreement is effective or until such notice
is given.
12. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
13. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no material amendment of this Agreement shall be
effective until approved by vote of the holders of a majority of the Fund's
outstanding voting securities.
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14. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. 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 constitution or
effect. Should any part of this Agreement 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 binding on and shall inure to the
benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto caused this Agreement to be
executed by their officers thereunto duly authorized.
Attest: XXXX XXXXX FUNDS MANAGEMENT, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------ ------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
Attest: XXXX XXXXX VALUE TRUST, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------ ------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
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APPENDIX A
Xxxx Xxxxx Value Trust, Inc. 1.00% of average daily net assets up to
$100 million;
0.75% of average daily net assets between
$100 million and $1 billion;
0.65% of average daily net assets over
$1 billion
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