Exhibit d
March 30, 1999
Westcap Investors, LLC
00000 Xxxxx Xxxxxx Xxxx., Xxx. 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
INVESTMENT ADVISORY AGREEMENT
Investors Research Fund, Inc. (the "Fund") is an open-ended, diversified
management investment company registered under the Investment Company Act of
1940, as amended (the "Act"). The Fund is engaged in the business of investing
and reinvesting its assets in securities of the type, and in accordance with the
limitations, specified in the Prospectus, Application and Statement of
Additional Information dated March 1, 1999, which is part of its effective
Registration Statement filed with the U.S. Securities and Exchange Commission,
all in such manner and to such extent as may from time-to-time be authorized by
the board of directors of the Fund. The Fund hereby retains you as investment
adviser for the consideration and upon the terms and conditions hereinafter set
forth:
1. The Fund employs you to manage the investment and reinvestment of its assets
and, without limiting the generality of the foregoing, to supervise the
investment affairs of the Fund, to make reviews of its investments, and to
effect investment changes whenever such changes appear to be desirable. In
addition, you are to perform all statistical, research and analysis services
necessary to the performance of your duties as investment adviser. Such services
shall be rendered directly to the Fund.
2. It is understood that you will from time-to-time employ or associate
with yourself such persons as you believe to be particularly fitted to assist
you in the execution of your duties hereunder, the cost of performance of such
duties to be borne and paid by you. You will provide adequate and suitable
office space for the performance of your duties hereunder. You will provide to
the Fund in writing, promptly following request, such information regarding
itself and the Fund's investments as shall be necessary for the preparation of
periodic reports to the Fund's stockholders and such other documents and papers
as may be required to comply with applicable laws and the rules, regulations and
other requirements of the Securities and Exchange Commission or other federal,
state or local governmental agencies. In compliance with Rule 31a-3 under the
Act, you agree that all records which you maintain for the Fund are the property
of the Fund. You agree to permit inspection by officers and directors of the
Fund, upon reasonable notice and at reasonable times, of all records, books,
INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
correspondence, stockholder lists, and other papers and documents maintained or
prepared by you in connection with the Fund's business and affairs. Furthermore,
you agree to maintain, preserve and make available all such records in
accordance and compliance with Section 31 of the Act, Section 204 of the
Investment Advisers Act of 1940 (as amended) and all governmental regulations
and requirements, as applicable to you in your capacity as investment adviser to
the Fund.
3. You will make decisions with respect to all purchases and sales of
securities for or on account of the Fund. To carry out such decisions, you are
hereby authorized, as the Fund's agent and attorney-in-fact, for the Fund's
account, at the Fund's investment risk, and in the Fund's name, to place orders
for the investment and reinvestment of its assets. In all purchases, sales and
other transactions in securities for the Fund, you are authorized to exercise
full discretion and act for the Fund in the same manner and with the same force
and effect as the officers and directors might or could do with respect to such
purchases, sales or other transactions, as well as with respect to all other
things necessary or incidental to the futherance or conduct of such purchases,
sales or other transactions. In this regard, however, it is understood that you
will not be making purchases and sales of securities on behalf of the Fund in
the capacity of a broker-dealer. Notwithstanding the foregoing, all procedures
for the making changes in the Fund's portfolio of securities, including
procedures for the placing and confirmation of orders with brokers and dealers,
shall at all times be and remain subject to the direction and control of the
Fund's board of directors and officers. You will, however, maintain such records
and perform such duties in connection with the Fund's portfolio of securities as
may be reasonably requested by the Fund, and as may be required by applicable
governmental laws and regulations.
4. The Fund shall provide you with all information under its control which
may be reasonably required for the performance of your duties hereunder, and
agrees to advise you promptly of any changes in the Fund's policies which may
affect any of your obligations hereunder. Except as otherwise specifically
provided hereinabove, you shall have no obligation to provide supervisory or
administrative services in connection with the general business and affairs of
the Fund, it being expressly agreed and understood that the Fund shall employ
other persons to maintain its own books and records, prepare and file with the
Securities and Exchange Commission and applicable governmental and
quasi-governmental authorities periodic reports and amendments to the Fund's
Registration Statement, prepare notices of stockholders' meetings, declarations
of dividends and other communications from the Fund to its stockholders, and to
operate and conduct the general business and administrative affairs of the Fund.
If, however, you or your affiliates shall render any such services at the
request of the officers or directors of the Fund, the Fund will pay to you or
such of your affiliates the fully burdened cost of such personnel for rendering
such services to the Fund at such rates as shall from time-to-time be agreed
upon between you and the Fund.
5. You will report to the board of directors of the Fund at each regularly
scheduled meeting thereof all changes in the Fund's portfolio since the prior
report, and will furnish to the Fund from time-to-time such information as you
may believe appropriate concerning the Fund's portfolio, whether concerning the
individual companies whose securities are included in the Fund's portfolio, the
industries in which they are engaged, or the conditions prevailing in the
economy generally. You will also furnish to the Fund such statistical and
analytical information with respect to securities in its portfolio as you may
believe appropriate concerning the Fund's portfolio, whether concerning the
individual companies whose securities are included in the Fund's portfolio, the
industries in which they are engaged, or the conditions prevailing in the
economy generally. You will also furnish to the Fund such statistical and
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
analytical information with respect to the securities in its portfolio as you
may believe appropriate or as the board of directors may reasonably request. In
making purchases and sales of securities, you will bear in mind the policies set
from time-to-time by the board of directors of the Fund as well as the
limitations imposed in the Fund's Registration Statement, the Act, and the
Internal Revenue Code of 1986, as amended, in respect of regulated investment
companies. Westcap will communicate with the Board of Directors of the Fund (the
"Board") on the items set forth below. As the Board becomes comfortable with the
progress and success of Westcap's involvement, the Board may request less
information and/or longer reporting periods from Westcap. Westcap will provide
the following information:
A) Performance of the Fund versus appropriate benchmarks will be
communicated every two weeks. We anticipate that the appropriate
benchmarks will include the S&P 500 Index, the Nasdaq Index, and other
comparative data as agreed upon with the Board.
B) Westcap will provide monthly statements to the Board which will show
the size of the portfolio, the transactions, receipts of dividend and
interest, and performance reporting.
C) Quarterly, Westcap will provide a summary of its views on the economic
and market environment, along with specific comments on portfolio
holdings.
D) Westcap will meet with the Board not less than quarterly to review the
entire scope of its relationship with the Fund--including, but not
limited to marketing, personnel and performance.
E) Westcap encourages members of the Board to call with any questions
they may have concerning any part of the relationship.
6. All expenses and charges incident to the operation of the Fund,
including, but not limited to, (a) payment of the fees payable to you under
Paragraph 7, (b) custody, transfer and dividend disbursing expenses, (c)
directors' fees and officers' compensation, (d) legal and auditing expenses, (e)
clerical, accounting and other office costs of the Fund, (f) the cost of
personnel providing services to the Fund, as provided in Paragraph 4, (g) costs
of printing the Fund's prospectus and reports to the stockholders, (h) costs of
maintenance of the Fund's corporate existence and qualifications to do business,
(i) interest and bank charges, taxes, brokerage fees and commissions, (j) costs
of stationery and supplies, (k) expenses and fees relating to registration and
filing with the Securities and Exchange Commission and state regulatory
authorities, and (l) such promotional expenses as may be contemplated by an
effective plan pursuant to Rule 12b-1 under the Act, providing, however, that
payment by the Fund of such promotional expenses shall be in an amount, and in
accordance with the procedures set forth in such plan, and excepting those
expenses to be paid by you as an incidence of the investment advisory services
to be performed by you hereunder, shall be borne and paid by the Fund either
directly or by way of reimbursement to you for any such expenses you have
advanced pursuant to agreement with the Fund.
7. In consideration of the services to be rendered by you, the Fund agrees
to pay to you a quarterly fee equal to 0.125% of the net assets of the Fund
calculated as an average of the net assets of the Fund as of the close of each
month of the Fund's fiscal year; said fee not to exceed 0.5% annually of the
average net assets of the Fund calculated as at the close of each month of the
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
Fund's fiscal year. The value of the Fund's assets shall be determined in
accordance with Section 2(a) (41) of the Act as of the last business day of each
month.
8. We shall expect of you, and you will give us the benefit of your best
professional judgment and effort in rendering services to the Fund. The Fund
agrees as an inducement to your undertaking these services that neither you, nor
your officers, members, employees or agents, or any affiliates of the foregoing
shall be liable for any mistake of judgment or opinion in connection with the
matters to which this Agreement relates, except for lack of good faith, provided
that nothing herein shall be deemed to protect, or purport to protect, you
against any liability to the Fund or its stockholders to which you would
otherwise be subject by reason of willful misfeasance, bad faith or negligence
in the performance of your obligations and duties hereunder, or by reason of
your reckless disregard of your obligations and duties hereunder.
The Fund agrees to indemnify, defend and hold you, and your officers,
members, employees and agents, harmless from and against any and all loss, cost,
damage, liability and expense (including, without limitation, reasonable
attorneys' fees and costs) which you or any of them may suffer, sustain or incur
as a result of (a) the Fund's breach of its representations in Section 9 hereof,
or (b) any matter resulting from or arising out of the operations of the Fund
prior to the date of this Agreement.
9. The Fund hereby continuously represents to you that (a) the shares of
the Fund have been and will continue to be offered and sold in compliance with
all applicable federal and state securities laws, including without limitation
the Act, Securities Act of 1933, as amended and the Securities Exchange Act of
1934, as amended, (b) the Fund is, and at all times during the term of this
Agreement will be, an open-end diversified management investment company duly
registered and in good standing under all applicable federal and state laws,
including, without limitation, the Act, (c) the Registration Statement and
prospectus to which the shares of the Fund have been and will be offered and
sold do not, and at all times during the term of this Agreement will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements make therein
not misleading, provided, however, that this clause (c) shall not apply to
statements in or omissions from such Registration Statement or prospectus made
in reliance upon and in conformity with information furnished to the Fund in
writing by you which is incorporated accurately into such Registration Statement
or prospectus, (d) no litigation or administrative proceeding or investigation
of or before any court or governmental body is currently pending against the
Fund and, to the best of its knowledge, none is threatened against it, and (e)
this Agreement has been approved by the board of directors of the Fund,
including a majority of the directors who are not interested persons thereof.
10. This Agreement shall become effective as of March 30, 1999 and shall
continue in effect until the first anniversary of such date, and thereafter for
successive twelve-month periods (computed from each anniversary date), provided
that such continuance is specifically approved at least annually by the board of
directors of the Fund or by vote of a majority of the outstanding voting
securities (as defined in Section 2(a) (42) of the Act) of the Fund, and, in
either case, by a majority of the board of directors who are not parties to this
Agreement or interested persons (as defined in section 2(a) (19) of the Act) of
any such party (other than as an officer or director of the Fund); provided,
further, however, that if the continuation of the Agreement is not approved, you
may continue to render to the Fund the services described herein in a manner and
to the extent permitted by the Act and the rules and regulations thereunder.
This Agreement may be terminated, without the payment of any penalty, by vote of
a majority of the outstanding voting securities (as defined in the Act) of the
Fund, or by a vote of a majority of the board of directors on sixty (60) days'
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
written notice to you, or by you on sixty (60) days' written notice to the Fund.
The Fund hereby agrees to call a meeting of the stockholders of the Fund to
consider and vote upon the approval of this Agreement within a reasonable time
period; and the prepare and prosecute any amendments to the Registration
Statement necessitated by this Agreement. If, within the one hundred twenty
(120) day period specified in Section 11, this Agreement shall not have been
approved by the holders of the majority of the shares of the Fund, this
Agreement shall terminate and you will be entitled to any fees earned by you as
provided in Paragraph 7.
11. The Fund represents that it has given notice of termination of its
current investment advisory contract. You shall not commence providing services
hereunder, or be entitled to any compensation hereunder, until the effective
date of such termination. It is recognized that this contract must be approved
by the Fund's shareholders pursuant to Section 15 of the Investment Company Act
of 1940 within 120 days after the effective date of such termination to remain
effective. The Fund will proceed promptly to solicit such approval upon
signature of this agreement by you.
12. This Agreement may not be transferred, assigned, sold, or in any manner
hypothecated or pledged by you, and this Agreement shall terminate automatically
in the event of any such transfer, assignment, sale, hypothecation or a pledge
by you. The terms, "transfer", "assignment" and "sale" as used in this paragraph
shall have the meanings ascribed to them by governing law and interpretations
thereof contained in rules or regulations promulgated by the Securities and
Exchange Commission thereunder. You may assign this Agreement in a transaction
in which you rely bona fide upon Rule 2a-6 under the Act upon notice to the
Fund.
13. In the event this Agreement is terminated for any reason and no
subsequent agreement is entered into between you and the Fund, all fees and all
other monies due to you hereunder shall be prorated as of the effective date of
termination and paid within twenty (20) business days thereafter. Upon such
termination, or within a reasonable time thereafter, you shall make available to
the Fund all books, records, correspondence, stockholders' lists and other
papers and documents pertaining to the Fund which are in your possession or
control. In the event that the Fund shall request that copies of any relevant
records by delivered to it, the Fund shall pay for the copying of those records.
In this regard, it is understood that it is your present practice to retain all
of your records without any destruction of such records for the period required
by the Act. You agree to notify the Fund immediately of any change in that
policy.
14. Except to the extent necessary to enable you to perform your
obligations hereunder, nothing herein shall be deemed to limit or restrict your
right, or the right of any of your officers, members or employees, or any
affiliates thereof, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual, trust or association.
15. In selecting brokers or dealers to execute purchases and sales of
portfolio securities for the Fund, you shall use your best efforts to obtain
best execution, which includes most favorable net results and execution of your
orders, taking into account all appropriate factors, including price, dealer
spread or commission, size and difficulty of transaction, and research services
provided. The Fund acknowledges and agrees that you may obtain from
broker-dealers supplemental research, market and statistical information for use
with respect to the Fund in accordance with Section 28(e) under the Securities
Exchange Act of 1934. The term "research, market and statistical information"
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
includes, without limitation, advice as to the value of securities, and the
availability of securities or purchasers or sellers of securities, and
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and performance of accounts. The
Fund understands that such information will be in addition to and not in lieu of
the services required to be performed by you under this Agreement and that your
expenses will not necessarily by reduced as a result of the receipt of such
information. The Fund also acknowledges that such information may be useful to
you and your affiliates in providing services to clients other than the Fund and
that not all such information will at all times be used by you in connection
with the Fund. Finally, the Fund acknowledges that information provided to you
and your affiliates by brokers and dealers through whom other clients of yours
effect securities transactions may be useful to you in providing services to the
Fund. The Fund understands that investment decisions for the Fund may not, at
all times, be made independently from those of other accounts managed by you and
your affiliates. In furtherance of the foregoing, the Fund agrees that, when the
same securities are purchased for or sold by the fund and any such other
accounts you may aggregate such orders, and you will allocate such purchases and
sales in a manner deemed by you to be fair and equitable to all of the accounts,
including the Fund.
16. You make the following representations on both a present and continuing
basis:
A. You currently have a Code of Ethics meeting the requirements of
17CFR ss.270.17j-1. You are currently enforcing that code and will continue to
maintain and enforce the code in accordance with both its letter and spirit.
B. You will be in compliance with all requirements to have your
record-keeping and administrative systems capable of handling the Year 2000
demands at the time such capability is required; provided, however, that you
make no representation regarding the compliance of any unaffiliated person
providing services to you. Upon meeting such requirements, you will provide
written certification to the Fund that you have the requisite capability in
place.
C. You have competent emergency procedures in place to assure your
continuing competent performance of your services hereunder in the event of an
emergency.
D. You will provide an prompt report to the Fund of any development
which does or might affect your ability to service the Fund in accordance with
this agreement, including any developments which may be covered under Section 9
of the Investment Company Act, as amended, or Rule 206(4)-4 under the Investment
Advisers Act.
17. All notices and communications to be made hereunder shall be in writing
and shall be delivered to the Fund or to you, as the case may be, by U.S.
certified mail, return receipt requested, postage prepaid, by commercial courier
or by personal delivery, in each case to the address set forth in this Agreement
or to such other person or address as shall be identified by written notice as
provided herein. Any notice or communication sent by mail as aforesaid, shall be
deemed delivered three (3) business days after deposit in the U.S. mail; any
notice sent personally or by commercial courier shall be deemed delivered upon
confirmation of receipt of such address.
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INVESTMENT ADVISORY AGREEMENT
Westcap Investors, LLC - Investors Research Fund, Inc.
March 30, 1999
18. This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof, and may be amended only by the written
consent of both parties. This Agreement shall be governed by and construed in
accordance with the laws of the State of California; provided, however, that
nothing herein shall be construed in a manner inconsistent with the Act, the
Investment Advisers Act, or any rule or regulation thereunder. If any provision
of this Agreement shall be held or made invalid by a court decision, statute,
rule or otherwise, the remainder shall not be thereby affected.
If the foregoing is satisfactory to you, please indicate your acceptance by
signing below.
Very truly yours,
INVESTORS RESEARCH FUND, INC.
By:
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Title:
ACCEPTED THIS ___ DAY OF MARCH, 1999
WESTCAP INVESTORS, LLC
By:
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