ICAP FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
This Agreement, entered into as of
,December 30, 1994, is between ICAP FUNDS, INC.,
a Maryland corporation (the "Corporation"), and
INSTITUTIONAL CAPITAL CORPORATION, a Delaware
corporation ("ICAP").
WHEREAS, the Corporation is an open-end
investment company registered under the Investment
Company Act of 1940, as amended (the "Act"). The
Corporation is authorized to create separate series,
each with its own separate investment portfolio (the
"Portfolios"), and the beneficial interest in each such
series will be represented by a separate series of
shares (the "Shares").
WHEREAS, ICAP is a registered investment
adviser, engaged in the business of rendering
investment advisory and management services.
WHEREAS, in managing the Corporation's
assets, as well as in the conduct of certain of its
affairs, the Corporation seeks the benefit of the
services of ICAP and its assistance in performing
certain managerial functions. ICAP desires to furnish
such services and to perform the functions assigned to
it under this Agreement for the consideration provided
for herein.
Accordingly, the parties have agreed as
follows:
1. Appointment. The Corporation hereby
appoints ICAP as investment adviser for each of the
Portfolios of the Corporation on whose behalf the
Corporation executes an Exhibit to this Agreement, and
ICAP, by execution of each such Exhibit, accepts the
appointments. Subject to the direction of the Board of
Directors (the "Directors") of the Corporation, ICAP
shall manage the investment and reinvestment of the
assets of each Portfolio in accordance with the
Portfolio's investment objective and policies and
limitations, for the period and upon the terms herein
set forth. The investment of funds shall also be
subject to all applicable restrictions of the Articles
of Incorporation and Bylaws of the Corporation as may
from time to time be in force.
2. Management Functions. In addition to
the expenses which ICAP may incur in the performance of
its investment advisory functions under this Agreement,
and the expenses which it may expressly undertake to
incur and pay, ICAP shall incur and pay the following
expenses:
(a) Reasonable compensation, fees and
related expenses of the Corporation's officers and
its Directors, except for such Directors who are
not interested persons (as that term is defined in
Section 2(a)(19) of the Act) of ICAP;
(b) Rental of offices of the
Corporation; and
(c) All expenses of promoting the sale
of Shares of the Portfolios other than expenses
incurred in complying with federal and state laws
and the law of any foreign country applicable to
the issue, offer, or sale of Shares of the
Portfolios.
3. Investment Advisory Functions. In its
capacity as investment adviser, ICAP shall have the
following responsibilities:
(a) To furnish continuous advice and
recommendations to the Portfolios, as to the
acquisition, holding or disposition of any or all
of the securities or other assets which the
Portfolios may own or contemplate acquiring from
time to time;
(b) To cause its officers to attend
meetings and furnish oral or written reports, as
the Corporation may reasonably require, in order
to keep the Directors and appropriate officers of
the Corporation fully informed as to the condition
of the investments of the Portfolios, the
investment recommendations of ICAP, and the
investment considerations which have given rise to
those recommendations; and
(c) To supervise the purchase and sale
of securities or other assets as directed by the
appropriate officers of the Corporation.
The services of ICAP are not to be deemed exclusive and
ICAP shall be free to render similar services to others
as long as its services for others does not in any way
hinder, preclude or prevent ICAP from performing its
duties and obligations under this Agreement. In the
absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or
duties hereunder on the part of ICAP, ICAP shall not be
subject to liability to the Corporation, the
Portfolios, or to any shareholder for any act or
omission in the course of, or connected with, rendering
services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any
security.
4. Obligations of the Corporation. The
Corporation shall have the following obligations under
this Agreement:
(a) To keep ICAP continuously and fully
informed as to the composition of the Portfolios'
investments and the nature of all of its assets
and liabilities;
(b) To furnish ICAP with a copy of any
financial statement or report prepared for it by
certified or independent public accountants, and
with copies of any financial statements or reports
made to the Portfolios' shareholders or to any
governmental body or securities exchange;
(c) To furnish ICAP with any further
materials or information which ICAP may reasonably
request to enable it to perform its functions
under this Agreement; and
(d) To compensate ICAP for its services
in accordance with the provisions of paragraph 5
hereof.
5. Compensation. Each Portfolio shall pay
to ICAP for its services a monthly fee, as set forth on
the Exhibits hereto, payable on the last day of each
month during which or during part of which this
Agreement is in effect. For the month during which
this Agreement becomes effective and any month during
which it terminates, however, there shall be an appro
priate proration of the fee payable for such month
based on the number of calendar days of such month
during which this Agreement is effective. ICAP may
from time to time and for such periods as it deems
appropriate reduce its compensation (and/or assume
expenses) for one or more of the Portfolios.
6. Expenses Paid by Corporation.
(a) Except as provided in this
paragraph, nothing in this Agreement shall be
construed to impose upon ICAP the obligation to
incur, pay, or reimburse the Corporation for any
expenses not specifically assumed by ICAP under
paragraph 2 above. Each Portfolio shall pay or
cause to be paid all of its expenses and the
Portfolio's allocable share of the Corporation's
expenses, including, but not limited to,
investment adviser fees; any compensation, fees,
or reimbursements which the Corporation pays to
its Directors who are not interested persons (as
that phrase is defined in Section 2(a)(19) of the
Act) of ICAP; fees and expenses of the custodian,
transfer agent, registrar or dividend disbursing
agent; current legal, accounting and printing
expenses; administrative, clerical, recordkeeping
and bookkeeping expenses; brokerage commissions
and all other expenses in connection with the
execution of portfolio transactions; interest; all
federal, state and local taxes (including stamp,
excise, income and franchise taxes); expenses of
shareholders' meetings and of preparing, printing
and distributing proxy statements, notices and
reports to shareholders; expenses of preparing and
filing reports and tax returns with federal and
state regulatory authorities; and all expenses
incurred in complying with all federal and state
laws and the laws of any foreign country
applicable to the issue, offer, or sale of Shares
of the Portfolios, including but not limited to,
all costs involved in the registration or
qualification of Shares of the Portfolios for sale
in any jurisdiction and all costs involved in
preparing, printing and distributing prospectuses
and statements of additional information to
existing shareholders of the Portfolios.
(b) If expenses borne by a Portfolio in
any fiscal year (including ICAP's fee, but
excluding interest, taxes, fees incurred in
acquiring and disposing of portfolio securities
and, to the extent permitted, extraordinary
expenses), exceed those set forth in any statutory
or regulatory formula prescribed by any state in
which Shares of a Portfolio are registered at such
time, ICAP will reimburse the Portfolio for any
excess.
7. Brokerage Commissions. For purposes of
this Agreement, brokerage commissions paid by a
Portfolio upon the purchase or sale of securities shall
be considered a cost of the securities of the Portfolio
and shall be paid by the respective Portfolios. ICAP
is authorized and directed to place portfolio
transactions only with brokers and dealers who render
satisfactory service in the execution of orders at the
most favorable prices and at reasonable commission
rates, provided, however, that ICAP may pay a broker or
dealer an amount of commission for effecting a
securities transaction in excess of the amount of
commission another broker or dealer would have charged
for effecting that transaction, if ICAP determines in
good faith that such amount of commission was
reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer
viewed in terms of either that particular transaction
or the overall responsibilities of ICAP. In placing
portfolio business with such broker-dealers, ICAP shall
seek the best execution of each transaction, and all
such brokerage placement shall be made in compliance
with Section 28(e) of the Securities Exchange Act of
1934 and other applicable state and federal laws.
Notwithstanding the foregoing, the Corporation shall
retain the right to direct the placement of all
portfolio transactions, and the Directors may establish
policies or guidelines to be followed by ICAP in
placing portfolio transactions for the Portfolios
pursuant to the foregoing provisions.
8. Proprietary Rights. ICAP has proprietary
rights in each Portfolio's name and the Corporation's
name. ICAP may withdraw the use of such names from the
Portfolio or the Corporation.
9. Termination. This Agreement may be
terminated at any time, without penalty, by the
Directors of the Corporation or by the shareholders of
a Portfolio acting by the vote of at least a majority
of its outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the Act), provided in
either case that 60 days' written notice of termination
be given to ICAP at its principal place of business.
This Agreement may be terminated by ICAP at any time by
giving 60 days' written notice of termination to the
Corporation, addressed to its principal place of
business.
10. Assignment. This Agreement shall
terminate automatically in the event of any assignment
(as the term is defined in Section 2(a)(4) of the Act)
of this Agreement.
11. Term. This Agreement shall begin for
each Portfolio as of the date of execution of the
applicable Exhibit and shall continue in effect with
respect to each Portfolio presently set forth on an
Exhibit (and any subsequent Portfolios added pursuant
to an Exhibit during the initial term of this Agreement
for two years from the date of this Agreement and
thereafter for successive periods of one year, subject
to the provisions for termination and all of the other
terms and conditions hereof if such continuation shall
be specifically approved at least annually by the vote
of a majority of the Directors of the Corporation,
including a majority of the Directors who are not
parties to this Agreement or interested persons of any
such party (other than as Directors of the
Corporation), cast in person at a meeting called for
that purpose. If a Portfolio is added after the first
approval by the Directors as described above, this
Agreement will be effective as to that Portfolio upon
execution of the applicable Exhibit and will continue
in effect until the next annual approval of this
Agreement by the Directors and thereafter for
successive periods of one year, subject to approval as
described above.
12. Amendments. This Agreement may be
amended by the mutual consent of the parties, provided
that the terms of each such amendment shall be approved
by the Directors or by of the affirmative vote of a
majority of the outstanding voting securities (as that
phrase is defined in Section 2(a)(42) of the Act) of
each Portfolio.
This Agreement will become binding on the
parties hereto upon their execution of the Exhibits to
this Agreement.
EXHIBIT A
to the
Investment Advisory Agreement
ICAP Discretionary Equity Portfolio
For all services rendered by ICAP hereunder,
the above-named Portfolio of the Corporation shall pay
ICAP and ICAP agrees to accept as full compensation for
all services rendered hereunder, an annual investment
advisory fee equal to .80 of 1% of the average daily
net assets of the Portfolio.
The portion of the fee based upon the average
daily net assets of the Portfolio shall be accrued
daily at the rate of 1/365th of .80 of 1% applied to
the daily net assets of the Portfolio.
The advisory fee so accrued shall be paid to
ICAP monthly.
Executed this 30th day of December, 1994.
INSTITUTIONAL CAPITAL
CORPORATION
By:/s/ Xxxxxx X. Xxxx
------------------------
Xxxxxx X. Xxxx, President
ICAP FUNDS, INC.
By:/s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
Vice President and Treasurer
EXHIBIT B
to the
Investment Advisory Agreement
ICAP Equity Portfolio
For all services rendered by ICAP hereunder,
the above-named Portfolio of the Corporation shall pay
ICAP and ICAP agrees to accept as full compensation for
all services rendered hereunder, an annual investment
advisory fee equal to .80 of 1% of the average daily
net assets of the Portfolio.
The portion of the fee based upon the average
daily net assets of the Portfolio shall be accrued
daily at the rate of 1/365th of .80 of 1% applied to
the daily net assets of the Portfolio.
The advisory fee so accrued shall be paid to
ICAP monthly.
Executed this 30th day of December, 1994.
INSTITUTIONAL CAPITAL
CORPORATION
By:/s/ Xxxxxx X. Xxxx
--------------------------
Xxxxxx X. Xxxx, President
ICAP FUNDS, INC.
By:/s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
Vice President and Treasurer
MW1-33455-1
