EXHIBIT D(1)
INVESTMENT ADVISORY AGREEMENT
May 3, 1999
XXXXXXX ASSET MANAGEMENT CORPORATION
0000 Xxxxxx xx xxx Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Gentlemen:
The undersigned, Xxxxxxx Investors Trust, a Delaware business trust
(the "Trust"), is an investment company registered under the Investment Company
Act of 1940, as amended ("1940 Act"). The Trust hereby engages you to act as the
investment adviser to each series of the Trust set forth on Schedule I and any
other series of the Trust as the parties may agree from time to time
(collectively, the "Funds"), subject to the terms and conditions set forth
below.
SECTION 1. INVESTMENT ADVISORY SERVICES.
a. You will regularly provide each Fund with investment research,
advice and supervision and will furnish continuously an investment program for
each Fund, consistent with the investment objectives and policies of each Fund.
You will from time to time recommend to each Fund what securities, in your
opinion, should be purchased or sold by the Fund and what portion of the assets
of the Fund should remain uninvested. In conducting such review and making such
recommendations, you will be guided by each Fund's investment policies and
restrictions as described in the Trust's registration statement under the
Securities Act of 1933, as amended, and the 1940 Act, as filed with the
Securities and Exchange Commission and as amended from time to time; by policies
adopted by the Board of Trustees; and by the provisions of the 1940 Act and the
rules promulgated thereunder, so that at all times each Fund will be in
compliance with its investment policies and restrictions and with the
requirements of the 1940 Act. The Trust agrees to supply you with copies of all
such documents and to notify you of any changes in the Funds' investment
policies and restrictions.
b. In rendering such investment advisory services to the Fund pursuant
to this Agreement, you may employ, retain or otherwise avail yourself of the
services or facilities of other persons or organizations for the purpose of
providing you or the Fund with statistical and other factual information, advice
regarding economic factors and trends, advice as to occasional transactions in
specific securities or any other information, advice or assistance that you may
deem necessary, appropriate or convenient for the discharge of your obligations
hereunder or otherwise helpful to the Fund or in the discharge of your overall
responsibilities with respect to the other accounts for which you or your
affiliates serve as investment adviser.
c. You may employ one or more sub-investment advisers (each a
"Subadviser") to provide investment advisory services to one or more of the
Funds by entering into a written agreement with each Subadviser. However, any
agreement first will be approved in accordance with the requirements of the 1940
Act as such requirements may be modified or superseded by rule, regulation,
order or interpretive position of the Securities and Exchange Commission. The
authority given to you in this Agreement may be delegated by you under any such
agreement; PROVIDED, that any Subadviser will be subject to the same
restrictions and limitations on investments and brokerage discretion as you are.
The Trust agrees that you will not be accountable to any Fund or its
shareholders for any loss or other liability relating to specific investments
directed by any Subadviser, even though you retain the right to reverse any such
investment, because, in the event a Subadviser is retained, you and the Funds
will rely almost exclusively on the expertise of such Subadviser for the
selection and monitoring of specific investments.
d. You and any person performing executive or trading functions for a
Fund, whose services were made available to the Fund by you, are specifically
authorized to allocate brokerage and principal business to firms that provide
such services or facilities and to cause a Fund to pay a member of a securities
exchange or any other securities broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange, broker or dealer would have charged for effecting that
transaction, if you or such person determine in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services (as such services are defined in Section 28(e) of the Securities
Exchange Act of 1934) provided by such member, broker or dealer, viewed in terms
of either that particular transaction or your or such person's overall
responsibilities with respect to the accounts as to which you or such person
exercise investment discretion (as that term is defined in Section 3(a)(35) of
the Securities Exchange Act of 1934).
SECTION 2. BOOKS, RECORDS AND REPORTS, ETC.
a. You will maintain all books and records with respect to each Fund's
securities transactions required by sub-paragraphs (b)(5), (6), (9) and (10) and
paragraph (f) of Rule 31a-1 under the 1940 Act (other than those records being
maintained by the Trust's administrator, custodian or transfer agent) and
preserve such records for the periods prescribed therefor by Rule 31a-2 under
the 1940 Act.
b. You will furnish to the Board of Trustees, at its regularly
scheduled meetings, and at such other times as the Board may reasonably request,
a resume of the portfolio and report on all matters pertaining to your services
as investment adviser. In addition, you will furnish the Trust with such reports
and other data as the Board may request, including, without being limited to,
industry surveys, news of recent developments, statistical data, and such other
information as may keep the Board properly informed on developments relating to
each Fund's portfolio, or similar data relating to securities which you
recommend for inclusion in the portfolio of each Fund.
SECTION 3. MULTIPLE CAPACITIES.
a. Nothing contained in this Agreement will prohibit you from acting,
and being separately compensated for acting, in one or more capacities on behalf
of the Trust including, but not limited to, the capacities of administrator,
broker and distributor. The Trust understands that you may act as investment
adviser or in other capacities on behalf of other investment companies and
customers. While information and recommendations you supply to the Funds will in
your judgment be appropriate under the circumstances and in light of the
investment objectives of each Fund, they may be different from the information
and recommendations you supply to other Funds, investment companies and
customers. You will give the Funds equitable treatment under the circumstances
in supplying information, recommendations and any other services requested of
you, but you will not be required to give preferential treatment to the Funds as
compared with the treatment given to any other investment company or customer.
Whenever you will act in multiple capacities on behalf of the Funds, you will
maintain the appropriate separate accounts and records for each such capacity.
All information and advice supplied by you to each Fund hereunder will be for
its own use exclusively.
b. Nothing in this Agreement will in any way limit or restrict you or
any of your officers, directors, or employees from buying, selling or trading in
any securities for your or their own accounts or other accounts.
c. When you deem the purchase or sale of a security to be in the best
interest of a Fund as well as other clients, you may, to the extent permitted by
applicable laws and regulations, aggregate the securities to be sold or
purchased in order to obtain the best execution and lower brokerage commissions,
if any. In such event, you will allocate the securities so purchased or sold, as
well as the expenses incurred in the transaction, in the manner you consider to
be the most equitable and consistent with your fiduciary obligations to the
Funds and to your other clients.
d. You are an independent contractor and not an employee of the Trust
for any purpose. If you ever give any advice to your clients concerning the
shares of the Trust, you will act solely as investment counsel for such clients
and not in any way on behalf of the Trust or any Fund.
SECTION 4. PAYMENT OF EXPENSES.
a. Except as otherwise provided herein, you will at your own expense
furnish to the Trust office space in your offices or in such other place as may
be agreed upon from time to time, and all necessary office facilities, equipment
and personnel for managing each Fund's investments, and you will arrange, if
desired by the Trust, for members of your organization to serve as trustees,
officers or agents of the Trust.
b. You will pay directly or reimburse the Trust for the compensation
(if any) of the Trustees who are affiliated with, or "interested persons" (as
defined in the 0000 Xxx) of, you and all officers of the Trust.
c. The Trust, on behalf of each Fund to the extent allowable to that
Fund, will assume and will pay: (i) charges and expenses for fund accounting,
pricing and appraisal services and related overhead, including, to the extent
such services are performed by your personnel, or your affiliates, office space
and facilities and personnel compensation, training and benefits; (ii) the
charges and expenses of auditors; (iii) the charges and expenses of any
administrator, custodian, transfer agent, plan agent, dividend disbursing agent
and registrar appointed by the Trust; (iv) issue and transfer taxes chargeable
to a Fund in connection with securities transactions to which the Fund is a
party; (v) insurance premiums, interest charges, dues and fees for membership in
trade associations and all taxes and corporate fees payable by the Trust to
federal, state or other governmental agencies; (vi) fees and expenses involved
in registering and maintaining registrations of the Trust and/or its shares with
the Commission, state or blue sky securities agencies and foreign countries,
including the preparation of prospectuses and statements of additional
information for filing with the Commission; (vii) all expenses of shareholders'
and Trustees' meetings and of preparing, printing and distributing prospectuses,
notices, proxy statements, and reports to shareholders and reports to
governmental agencies; (viii) charges and expenses of legal counsel to the Trust
and the Trustees; (ix) any distribution fees paid by a Fund in accordance with
Rule 12b-1 under the 1940 Act; (x) compensation of those Trustees of the Trust
who are not affiliated with or interested persons of you, the Trust (other than
as Trustees) or Xxxxxxx Securities, Inc.; (xi) the cost of preparing and
printing share certificates; and (xii) interest on borrowed money, if any.
d. In addition to the expenses described in Section 4(c) above, each
Fund will pay all brokers' and underwriting commissions chargeable to the Fund
in connection with securities transactions to which the Fund is a party.
SECTION 5. COMPENSATION FOR SERVICES.
a. Each Fund will pay you, as compensation for your services and
expenses assumed hereunder, a fee as set forth in Schedule II. Management fees
payable hereunder will be computed daily and paid monthly in arrears. If this
Agreement is effective subsequent to the first day of the month, or if this
Agreement is terminated, the fee provided in this section will be computed on
the basis of the number of days in the month for which this Agreement is in
effect, subject to a pro rata adjustment based on the number of days elapsed in
the current month as a percentage of the total number of days in such month.
b. You may from time to time agree not to impose all or a portion of
your fee otherwise payable hereunder (in advance of the time such fee or a
portion thereof would otherwise accrue) and/or undertake to pay or reimburse the
Trust for all or a portion of its expenses not otherwise required to be borne or
reimbursed by you. Any such fee reduction or undertaking may be discontinued or
modified by you at any time.
c. Nothing herein will preclude you or your affiliates from executing
brokerage transactions for the Funds, charging the Funds brokerage commissions
for these transactions and deriving a profit from these transactions.
SECTION 6. LIABILITY OF THE INVESTMENT ADVISER.
a. You will be liable for your own acts and omissions caused by your willful
misfeasance, bad faith, or gross negligence in the performance of your duties or
by your reckless disregard of your obligations under this Agreement, and nothing
herein will protect you against any such liability to the Trust or its
shareholders. You will not be liable for the acts and omissions of any agent
employed by you, nor for those of any bank, trust company, broker or other
person with whom or into whose hands any moneys, shares of the Trust or
securities and investments may be deposited or come in compliance with the
provisions of this Agreement. You will not be liable for any defect in title of
any property acquired, nor for any loss unless it occurs through your own
willful default. Subject to the first sentence of this section, you will not be
liable for any action taken or omitted on advice, obtained in good faith, of
counsel, provided such counsel is satisfactory to the Trust.
b. None of the trustees, officers, agents or shareholders of the Trust
will be personally liable hereunder or are assuming any liability for
obligations entered into on behalf of the Trust. All persons dealing with the
Trust must look solely to the property of the Trust for the enforcement of any
claims against the Trust. No Fund will be liable for any claims against any
other Fund of the Trust.
SECTION 7. USE OF THE NAME "XXXXXXX."
a. The Trust agrees that in the event that neither you nor any of your
affiliates acts as an investment adviser to the Trust or a Fund, the name of the
Trust or Fund will be changed to one that does not contain the name "Xxxxxxx" or
otherwise suggest an affiliation with you.
SECTION 8. TERMINATION OF AGREEMENT, ASSIGNMENT AND AMENDMENT.
a. This Agreement may be terminated at any time with respect to any
Fund without the payment of any penalty upon 60 days' written notice by the
terminating party to the other party, by you or by the Trust acting pursuant to
a resolution adopted by the Board, or by the vote of the holders of the lesser
of (1) 67% of the affected Fund's voting shares present at a meeting if the
holders of more than 50% of the outstanding shares of that Fund are present in
person or by proxy, or (2) more than 50% of the outstanding shares of that Fund.
b. This Agreement will automatically terminate in the event of its
assignment. Termination will not affect rights of the parties which have accrued
prior thereto.
c. This Agreement contains the entire agreement of the parties hereto,
and is intended to be the complete and exclusive statement of the terms hereof.
It may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with any
applicable requirements of the 1940 Act as modified or superseded by any rule,
regulation, order on interpretive position of the Commission.
SECTION 9. DURATION OF AGREEMENT.
a. Unless sooner terminated, this Agreement will continue in effect
until April 30, 2001, and from year to year thereafter until terminated,
provided that the continuation of the Agreement and the terms thereof are
approved annually in accordance with the requirements of the 1940 Act, as
modified or superseded by rule, regulation, order or interpretative position of
the Commission, subject to your right and the Trust's right to terminate this
Agreement as provided in Section 8 hereof.
SECTION 10. DEFINITIONS.
a. The terms "assignment" and interested person" when used in this
Agreement will have the meanings given such terms in the 1940 Act.
SECTION 11. CONCERNING APPLICABLE PROVISIONS OF LAW.
a. This Agreement will be subject to all applicable provisions of law,
including, without being limited to, the applicable provisions of the 1940 Act.
To the extent that any provisions herein conflict with any applicable provisions
of law, the latter will control.
b. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
c. This Agreement will be governed by the substantive law of the State
of New York and the applicable provisions of the 1940 Act.
d. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
SECTION 12. EFFECTIVE DATE.
a. This Agreement is effective May 3, 1999.
SECTION 13. MISCELLANEOUS.
a. The captions in this agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
Very truly yours,
XXXXXXX INVESTORS TRUST
By: /S/ XXX X. XXXXXXX
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Name: Xxx X. Xxxxxxx
Title: President and Chief Executive Officer
Attest: /S/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
Secretary
Accepted:
XXXXXXX ASSET MANAGEMENT CORPORATION
By: /S/ XXX X. XXXXXXX
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Name: XXX X. XXXXXXX
-----------------------------------
Title: PRESIDENT AND CEO
---------------------------------
Attest: /S/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
Secretary
SCHEDULE I
As of May 3, 1999 as amended October 13, 1999:
Xxxxxxx Fund
Xxxxxxx Money Market Fund
Xxxxxxx Dow 30 Focus Fund
Xxxxxxx Financial Services Fund
Xxxxxxx Small Cap Value Fund
Xxxxxxx U.S. Treasury Money Market Fund
SCHEDULE II
ANNUAL FEE RATE AS A PERCENTAGE FUND
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OF AVERAGE DAILY NET ASSET VALUE
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Xxxxxxx Fund 0.60
Xxxxxxx Money Market Fund 0.45
Xxxxxxx Dow 30 Focus Fund 0.60
Xxxxxxx Financial Services Fund 0.75
Xxxxxxx Small Cap Value Fund 1.00
Xxxxxxx U.S. Treasury Money Market Fund 0.40
The average net asset value for the month will be based on the net
asset value used in determining the price at which Fund shares are sold,
repurchased or redeemed on each day of the month.
If this Agreement becomes effective as to a Fund subsequent to the
first day of a month, or terminates before the last day of a month, your
compensation for such fraction of the month will be determined by applying the
foregoing percentages to the average daily net asset value of the Fund during
such fraction of a month and in the proportion that such fraction of a month
bears to the entire month.
