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EXHIBIT 5(f)
HOTCHKIS AND WILEY FUNDS
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 6th day of December, 1994, and amended and
restated as of October 31, 1995, by and between HOTCHKIS AND WILEY FUNDS (the
"Trust"), a Massachusetts business trust, and HOTCHKIS AND WILEY (the
"Advisor").
WITNESSETH:
Whereas, one series of the Trust having separate assets and liabilities
has been created entitled the "Total Return Bond Series" (hereafter the "Total
Return Fund"); and
Whereas, it is desirable to have a new investment advisory agreement
(i.e., this Agreement) relating to the Total Return Fund that supersedes the
former agreement and contains the new fee schedule that was approved by
shareholders of the Total Return Fund at a meeting duly called and held on
October 13, 1995.
In consideration of the mutual promises and agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed by and between the parties hereto as follows:
1. In General
The Advisor agrees, all as more fully set forth herein, to act as
managerial investment advisor to the Trust with respect to the investment of
the assets of the Total Return Fund and to supervise and arrange the purchase
and sale of securities held in the portfolio of the Total Return Fund.
2. Duties and Obligations of the Advisor with respect to Investment of
Assets of the Total Return Fund
(a) Subject to the succeeding provisions of this section and
subject to the direction and control of the Board of Trustees
of the Trust, the Advisor shall:
(i) Decide what securities shall be purchased or sold by the
Trust with respect to the Total Return Fund and when; and
(ii) Arrange for the purchase and the sale of securities held
in the portfolio of the Total Return Fund by placing purchase
and sale orders for the Trust with respect to the Total
Return Fund.
(b) Any investment purchases or sales made by the Advisor shall at
all times
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conform to, and be in accordance with, any requirements imposed by: (1)
the provisions of the Investment Company Act of 1940 ("1940 Act") and of
any rules or regulations in force thereunder; (2) any other applicable
provisions of law; (3) the provisions of the Declaration of Trust and
By-Laws of the Trust as amended from time to time; (4) any policies and
determinations of the Board of Trustees of the Trust; and (5) the
fundamental policies of the Trust relating to the Total Return Fund, as
reflected in the Trust's Registration Statement under the 1940 Act, or
as amended by the shareholders of the Total Return Fund.
(c) The Advisor shall give the Trust the benefit of its best
judgment and effort in rendering services hereunder, but the Advisor
shall not be liable for any loss sustained by reason of the purchase,
sale or retention of any security whether or not such purchase, sale or
retention shall have been based on its own investigation and research or
upon investigation and research made by any other individual, firm or
corporation, if such purchase, sale or retention shall have been made
and such other individual, firm or corporation shall have been selected
in good faith. Nothing herein contained shall, however, be construed to
protect the Advisor against any liability to the Trust or its security
holders by reason of willful misfeasance, bad faith, or gross negligence
in the performance of its duties, or by reason of its reckless disregard
of obligations and duties under this Agreement.
(d) Nothing in this Agreement shall prevent the Advisor or any
affiliated person (as defined in the 0000 Xxx) of the Advisor from
acting as investment advisor or manager and/or principal underwriter for
any other person, firm or corporation and shall not in any way limit or
restrict the Advisor or any such affiliated person from buying, selling
or trading any securities for its or their own accounts or the accounts
of others for whom it or they may be acting, provided, however, that the
Advisor expressly represents that it will undertake no activities which,
in its judgment, will adversely affect the performance of its
obligations to the Trust under this Agreement.
(e) It is agreed that the Advisor shall have no responsibility or
liability for the accuracy or completeness of the Trust's Registration
Statement under the 1940 Act or the Securities Act of 1933 except for
information supplied by the Advisor for inclusion therein. The Trust may
indemnify the Advisor to the full extent permitted by the Trust's
Declaration of Trust.
3. Broker-Dealer Relationships
The Advisor is responsible for decisions to buy and sell securities for
the Total Return Fund, broker-dealer selection, and negotiation of brokerage
commission rates. The Advisor's primary consideration in effecting a securities
transaction will be execution at the most favorable price. In selecting a
broker-dealer to execute each particular
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transaction, the Advisor will take the following into consideration: the best
net price available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the investment performance
of the Total Return Fund on a continuing basis. Accordingly, the price to the
Total Return Fund in any transaction may be less favorable than that available
from another broker-dealer if the difference is reasonably justified by other
aspects of the portfolio execution services offered. Subject to such policies
as the Board of Trustees of the Trust may determine, the Advisor shall not be
deemed to have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of its having caused the Total Return
Fund to pay a broker or dealer that provides brokerage or research services to
the Advisor an amount of commission for effecting a portfolio transaction in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction, if the Advisor 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 the particular transaction or the Advisor's overall
responsibilities with respect to the Trust. The Advisor is further authorized
to allocate the orders placed by it on behalf to the Total Return Fund to such
brokers or dealers who also provide research or statistical material, or other
services, to the Trust, the Advisor, or any affiliate of either. Such allocation
shall be in such amounts and proportions as the Advisor shall determine, and
the Advisor shall report on such allocations regularly to the Trust, indicating
the broker-dealers to whom such allocations have been made and the basis
therefor. The Advisor is also authorized to consider sales of shares as a
factor in the selection of brokers or dealers to execute portfolio
transactions, subject to the requirements of best execution, i.e., that such
brokers or dealers are able to execute the order promptly and at the best
obtainable securities price.
4. Allocation of Expenses
The Advisor agrees that it will furnish the Trust, at the Advisor's
expense, with all office space and facilities, and equipment and clerical
personnel necessary for carrying out its duties under this Agreement. The
Advisor (or an affiliate thereof) will also pay all compensation of all
Trustees, officers and employees of the Trust who are affiliated persons of the
Advisor. All operating costs and expenses relating to the Total Return Fund
not expressly assumed by the Advisor under this Agreement shall be paid by the
Trust from the assets of the Total Return Fund, as applicable, including, but
not limited to (i) interest and taxes; (ii) brokerage commission; (iii)
insurance premiums; (iv) compensation and expenses of the Trust's Trustees
other than those affiliated with the Advisor; (v) legal and audit expenses;
(vi) fees and expenses of the Trust's custodian, shareholder servicing or
transfer agent and accounting services agent; (vii) expenses incident to the
issuance of the Total Return Fund's shares, including issuance on the payment
of, or reinvestment of, dividends; (viii) fees and expenses incident to the
registration under Federal or state securities laws of the Trust or the shares
of the Total
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Return Fund; (ix) expenses of preparing, printing and mailing reports and
notices and proxy material to shareholders of the Trust; (x) all other expenses
incidental to holding meetings of the Trust's shareholders; (xi) dues or
assessments of or contributions to the Investment Company Institute or any
successor; (xii) such non-recurring expenses as may arise, including litigation
affecting the Trust and the legal obligations which the Trust may have to
indemnify its officers and Trustees with respect thereto; and (xiii) all
expenses which the Trust or the Total Return Fund agree to bear in any
distribution agreement or in any plan adopted by the Trust and/or the Total
Return Fund pursuant to Rule 12b-1 under the 1940 Act.
5. Compensation of the Advisor
(a) The Trust agrees to pay the Advisor and the Advisor agrees
to accept as full compensation for all services rendered by the Advisor
hereunder, an annual management fee, payable monthly and computed on the
value of the average net assets of the Total Return Fund as of the close
of business each business day, at the annual rate of .55%.
(b) In the event the expenses of the Total Return Fund
(including the fees of the Advisor and amortization of organization
expenses but excluding interest, taxes, brokerage commissions,
extraordinary expenses and sales charges and any distribution fees) for
any fiscal year exceed the limits set by applicable regulations of state
securities commissions, the Advisor will reduce its fee by the amount of
such excess. Any such reductions are subject to readjustment during the
year. The payment of the management fee at the end of any month will be
reduced or postponed or, if necessary, a refund will be made to the
Trust as to the Total Return Fund so that at no time will there be any
accrued but unpaid liability under this expense limitation.
6. Duration and Termination
(a) This Agreement as amended and restated shall go into effect
on October 31, 1995 and shall, unless terminated as hereinafter
provided, continue in effect until October 31, 1997, and thereafter from
year to year, but only so long as such continuance is specifically
approved at least annually by the Trust's Board of Trustees, including
the vote of a majority of the Trustees who are not parties to this
Agreement or "interested persons" (as defined in the 0000 Xxx) of any
such party cast in person at a meeting called for the purpose of voting
on such approval, or by the vote of the holders of a "majority" (as so
defined) of the outstanding voting securities of the Total Return Fund
and by such a vote of the Trustees.
(b) This Agreement may be terminated by the Advisor at any time
without penalty upon giving the Trust sixty (60) days' written notice
(which notice may
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be waived by the Trust) and may be terminated by the Trust at
any time without penalty upon giving the Advisor sixty (60)
days' written notice (which notice may be waived by the
Advisor), provided that such termination by the Trust shall be
directed or approved by the vote of a majority of all of its
Trustees in office at the time or by the vote of the holders of
a majority (as defined in the 0000 Xxx) of the voting securities
of the Trust at the time outstanding and entitled to vote. This
Agreement shall automatically terminate in the event of its
assignment (as so defined).
7. Agreement Binding Only on Fund Property
The Advisor understands that the obligations of this Agreement are not
binding upon any shareholder of the Trust personally, but bind only the Trust's
property; the Advisor represents that it has notice of the provisions of the
Trust's Declaration of Trust disclaiming shareholder liability for acts or
obligations of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by duly authorized persons and their seals to be
hereunto affixed, all as of the day and year above written.
HOTCHKIS AND WILEY FUNDS
By /s/ Xxxxx X. Xxxxxx
_____________________________________
ATTEST: President
/s/ Xxxxxx Xxxxxxxx
____________________________
HOTCHKIS AND WILEY
By Xxxxxx Xxxxx
_____________________________________
ATTEST: Managing Director
/s/ Xxxxx Xxxxxx
____________________________
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