INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of September 13, 1994 by and between St. Xxxxx
Portfolios, a New York trust (the "Trust") registered as an open-end investment
company under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), and United States Trust Company of New York, a New York trust
company (the "Adviser").
In consideration of the promises and the mutual covenants herein contained,
the Trust and the Adviser agree as follows:
1. Appointment. The Trust appoints the Adviser to act as investment adviser
to the Trust with respect to the series of the Trust listed on Exhibit A hereto
(the "Series") for the period and on the terms set forth in this Agreement. The
Adviser accepts such appointment and agrees to provide an investment program for
the compensation provided by this Agreement. In providing the services and
assuming the obligations set forth herein, the Adviser may, at its own expense,
employ one or more subadvisers; provided that the Adviser understands and agrees
that it shall remain fully responsible for the performance of all the duties set
forth in this Agreement and that it shall supervise the activities of each
subadviser. Any agreement between the Adviser and a subadviser shall be subject
to the renewal, termination and amendment provisions applicable to this
Agreement.
2. Duties of the Adviser. Subject to the direction and control of the Board
of Trustees of the Trust, the Adviser shall:
(a) prepare (or otherwise obtain) and evaluate on both a macroeconomic and
microeconomic level any pertinent research; statistical, financial and economic
data; and other information necessary or appropriate for the performance of its
duties under this Agreement;
(b) formulate and continuously review, supervise, and administer an
investment program for the Series;
(c) determine the securities to be purchased by the Series, and
continuously monitor such securities and the issuers thereof to determine
whether and when to sell, exchange, or take any other action concerning such
securities;
(d) determine whether and how to exercise warrants, voting rights, or other
rights with respect to the Series' securities;
(e) provide valuations with respect to the securities held by the Series;
(f) render regular reports to the Trust's officers and the Board of
Trustees concerning the investment performance of the Trust, the Adviser's
discharge of its responsibilities under this Agreement, and any other subject as
the Trust's officers or Board of Trustees reasonably may request; and
(g) assist the Trust's officers in connection with the operation of the
Trust and perform any further acts that may be necessary to effectuate the
purposes of this Agreement.
3. Supervision and Compliance. The activities of the Adviser shall be
subject at all times to the direction and control of the Board of Trustees of
the Trust and shall comply with: (a) the Declaration of Trust and By-Laws of the
Trust; (b) the Registration Statement of the Trust, as it may be amended from
time to time, including the investment objectives and policies set forth
therein; (d) the Investment Company Act and the regulations thereunder; (e) the
Internal Revenue Code of 1986 and the regulations thereunder applicable to
regulated investment companies; (f) any other applicable laws or regulations;
and (g) such other limitations as the Board of Trustees may adopt.
4. Purchase and Sale of Securities. The Adviser shall, at its own expense,
place orders for the purchase, sale or loan of securities by the Trust either
directly with the issuer or with any broker and/or dealer who deals in such
securities.
(a) In placing orders with brokers and/or dealers, the Adviser shall use
its best efforts to obtain the best net price and the most favorable execution
of its orders, after taking into account 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 and/or dealer,
and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. Consistent with this obligation, the
Adviser may, to the extent permitted by law, purchase and sell portfolio
securities to and from brokers who provide brokerage and research services
(within the meaning of Section 28(e) of the Securities and Exchange Act of 1934)
to or for the benefit of the Trust and/or other accounts over which the Adviser
exercises investment discretion. The Adviser is authorized to pay a broker who
provides such brokerage and research services a commission for effecting a
securities transaction which is in excess of the amount of commission another
broker would have charged for effecting that transaction, if the Adviser
determines in good faith that such commission was reasonable in relation to the
value of brokerage and research services provided by such broker. This
determination may be viewed in terms of either that particular transaction or of
the overall responsibilities of the Adviser with respect to the accounts as to
which it exercises investment discretion.
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(b) The Adviser may execute transactions through itself and its affiliates
on a securities exchange provided that the commissions paid by the Trust are
"reasonable and fair" compared to commissions received by other brokers having
comparable execution capability and provided that the transactions are effected
pursuant to procedures established by the Board of Trustees of the Trust. An
affiliated broker may transmit, clear and settle transactions for the Trust that
are executed on a securities exchange provided that the affiliated broker
arranges for unaffiliated brokers to execute the transactions.
(c) Notwithstanding the foregoing, the Board of Trustees periodically shall
review the commissions paid by the Trust and determine whether those commissions
were reasonable in relation to the brokerage and research services received. In
addition, the Board of Trustees of the Trust, in its discretion, may instruct
the Adviser to effect all or a portion of its securities transactions with one
or more brokers and/or dealers selected by the Board of Trustees, if it
determines that the use of such brokers and/or dealers is in the best interest
of the Trust.
(d) When the Adviser deems the purchase or sale of a security to be in the
best interest of the Trust as well as other customers, the Adviser, to the
extent permitted by applicable law, may aggregate the securities to be so sold
or purchased in order to obtain the best execution or lower brokerage
commissions. The Adviser also may purchase or sell a particular security for one
or more customers in different amounts. Allocation of the securities purchased
or sold in either manner, as well as the expenses incurred in the transactions,
will be made by the Adviser in a manner that is equitable and consistent with
applicable law and regulations and with its fiduciary obligations to the Trust
and to such other customers.
5. Expenses.
(a) The Adviser shall furnish at its own expense all office space, office
facilities, equipment and personnel necessary or appropriate to the performance
of its duties under this Agreement. The Adviser also shall pay the salaries and
fees of all personnel of the Trust or the Adviser performing services related to
the Adviser's duties under this Agreement.
(b) It is understood that the Trust will pay all of its expenses and
liabilities, including compensation of its independent Trustees; taxes and
governmental fees; interest charges; fees and expenses of the Trust's
independent auditors and legal counsel; trade association membership dues; fees
and expenses of any custodian (including safekeeping of funds and securities,
maintenance of books and accounts and calculation of
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the net asset value of beneficial interests of the Series), transfer agent and
registrar and dividend disbursing agent of the Trust; expenses of preparing and
mailing reports to investors and regulatory agencies; expenses relating to the
issuance, registration and qualification of shares of the Series, and the
preparation, printing and mailing of prospectuses for such purposes; insurance
premiums; brokerage and other expenses of executing portfolio transactions;
expenses of investors' and Trustees' meetings; organization expenses; and
extraordinary expenses.
6. Compensation of the Adviser. In consideration of the services to be
rendered by the Adviser under this Agreement, the Trust shall pay the Adviser a
fee accrued daily and paid monthly from the Series at an annual rate equal to
that specified in Exhibit A to this Agreement for the Series' average daily net
assets. The fee for any period in which the Adviser serves as investment adviser
pursuant to this Agreement for less than one full month shall be paid for that
portion of the month accrued. For purposes of calculating fees, the value of the
net assets of the Series shall be computed in the manner specified in its
Registration Statement on Form N-1A.
7. Services to Others. The services of the Adviser to the Trust are not to
be deemed exclusive, and the Adviser is free to render services to others and to
engage in other activities, provided, however, that those services and
activities do not adversely affect the Adviser's ability to perform its
obligations under this Agreement.
8. Books, Records, and Information. The Adviser shall provide the Trust
with all records concerning the Adviser's activities that the Trust is required
by law to maintain. Any records required to be maintained and preserved pursuant
to the provisions of Rule 31a-1 and Rule 31a-2 under the Investment Company Act
which are prepared or maintained by the Adviser on behalf of the Trust are the
property of the Trust and will be surrendered promptly to the Trust on request.
The Trust also shall comply with all reasonable requests for information by the
Trust's officers or Board of Trustees, including information required for the
Trust's filings with the Securities and Exchange Commission and state securities
commissions.
9. Limitations on Liability.
(a) The Adviser hereby is notified expressly of the limitation of
shareholder liability as set forth in the Declaration of Trust and agrees that
any obligation of the Trust or the Series arising in connection with this
Agreement shall be limited in all cases to the Series and its assets, and the
Adviser shall not seek satisfaction of any such obligation from any Trustee or
shareholder of the Series.
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(b) The Adviser shall give the Trust the benefit of its best judgment and
efforts in rendering services under this Agreement. In the absence of willful
malfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Adviser, the Adviser shall not be liable to
the Trust or to any shareholder of the Series for any act or omission in the
course of, or connected with, rendering services under this Agreement or for any
losses that may be sustained in the purchase, holding or sale of any security.
10. Effective Date; Termination; Amendments.
(a) This Agreement shall be effective as to the Series on the date the
Series commences investment operations, and, unless terminated sooner as
provided herein, shall continue until the second anniversary of the execution of
this Agreement. Thereafter, unless terminated sooner as provided herein, this
Agreement shall continue in effect as to the Series for successive annual
periods, provided that such continuance is specifically approved at least
annually by the vote of a majority of the Board of Trustees of the Trust 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 continuance, and
either: (i) the vote of a majority of the outstanding voting securities of the
Series; or (ii) the vote of a majority of the full Board of Trustees.
(b) This Agreement may be terminated at any time, without the payment of
any penalty, either by: (i) the Trust, by action of the Board of Trustees or by
vote of a majority of the outstanding voting securities of the Series, on 60
days' written notice to the Adviser; or (ii) the Adviser, on 90 days' written
notice to the Trust. This Agreement shall terminate immediately in the event of
its assignment.
(c) This Agreement may be amended only if such amendment is approved by the
vote of a majority of the outstanding voting securities of the Trust or by vote
of a majority of the Board of Trustees of the Trust 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 amendment.
(d) As used in this Agreement, the terms "specifically approved at least
annually," "majority of the outstanding voting securities," "interested persons"
and "assignment" shall have the same meanings as such terms have in the
Investment Company Act and the regulations thereunder.
11. Governing Law. This Agreement shall be construed in accordance with the
laws of the Commonwealth of Massachusetts without giving effect to the choice of
law provisions thereof, to
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the extent that such laws are consistent with provisions of the Investment
Company Act and the regulations thereunder.
12. Miscellaneous. The captions in this Agreement are included for the
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. Should any
part of this Agreement be held or made invalid by a court decision, statute,
regulation, or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding and shall inure to the benefit of the
parties hereto and their respective successors, to the extent permitted by law.
IN WITNESS WHEREOF, the Trust and the Adviser have caused this Agreement to
be executed and delivered in their names and on their behalf by the undersigned,
duly authorized officers, all as of the day and year first above written.
Attest: ST. XXXXX PORTFOLIOS
/S/ Xxxxxx X. Xxxxxxx By:/S/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxxx
Assistant Secretary President
Attest: UNITED STATES TRUST COMPANY OF
NEW YORK
By:
Name:
Title:
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Exhibit A
SCHEDULE OF SERIES AND FEES UNDER INVESTMENT
ADVISORY AGREEMENT
Series Name Annual Fee (as a percentage of
the average daily net assets
of the series)
Income Portfolio 65 basis points
Total Return Bond Portfolio 65 basis points
Equity Portfolio 65 basis points
