EXHIBIT 5
XXXXXXXX CAPITAL FUNDS (DELAWARE)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made as of the 9th day of January, 1996 between Xxxxxxxx Capital
Funds (Delaware), a Delaware Business Trust (the "Trust") and Xxxxxxxx Capital
Management International Inc., a New York Corporation (the "Adviser").
W I T N E S S E T H:
1. Prior to the effective date hereof, the Trust will furnish the Adviser
with copies properly certified or authenticated of each of the following:
(a) Trust Instrument of the Trust.
(b) Resolutions of the Board of Trustees of the Trust selecting
Xxxxxxxx Capital Management International Inc. as investment adviser and
approving the form of this Agreement. The Trust will furnish the Adviser
from time to time with copies, properly certified or authenticated, of all
amendments of or supplements to the foregoing, if any.
2. The Adviser will regularly provide the Trust with respect to its class
of Common Stock and related investment portfolio entitled Xxxxxxxx U.S. Equity
Fund (the "Portfolio") with investment research, advice and supervision and will
furnish continuously an investment program for the Portfolio's investments
consistent with the Trust's investment objectives for the Portfolio as set forth
in its Registration Statement, Form N-1A, as it may from time to time be in
effect under the Securities Act of 1993, as amended (hereinafter referred to as
the "1933 Act"). the Adviser will recommend what securities shall be bought or
sold by the Portfolio, and what portion of the Portfolio's assets shall be held
uninvested, subject always to the provisions of the Trust's Trust Instrument,
Registration Statement on Form N-1A under the 1933 Act and of the Investment
Company Act of 1940, as amended (hereinafter referred to as the "1940 Act"), as
each of the same shall be from time to time amended. The Adviser shall advise
and assist the officers of the Trust in taking such steps as are necessary or
appropriate to carry out the decisions of its Board of Trustees and the
appropriate committees of such Board regarding the foregoing matters and general
conduct of the investment business of the Portfolio.
3. (a) The Adviser will pay directly all office rent of the Trust to the
extent there is any.
(b) The Adviser will furnish or cause to be furnished without expense
to the Trust or the Portfolio, the services of such of the Adviser's officers
and employees and officers and employees of corporate affiliates of the Adviser,
as may be duly elected officers or trustees of the Trust, subject to their
individual consent to serve and to any limitations imposed by law.
(c) The Adviser will provide for the Portfolio investment advisory,
research and statistical facilities and all clerical services relating to
research, statistical and investment work.
(d) Except to the extent provided in subsections (a), (b) and (c)
above, the Adviser shall have no responsibility or obligation to pay any costs
or expenses of the Trust or the Portfolio, including without limiting the
generality of the foregoing, brokers' commissions; legal, auditing or accounting
expenses, taxes or governmental fees; cost of preparing share certificates or
any other expenses (including clerical expenses) of issue (except that nothing
herein shall require the Trust or the Portfolio to bear any sales or promotional
expenses unless incurred pursuant to a plan or plans from time to time in effect
in the future duly adopted in accordance with Rule 12b-1 under the 1940 Act or a
successor provision), distribution, redemption or repurchase of shares of the
Trust; registration expenses under the 1933 Act or 1940 Act subsequent to the
initial registration thereunder (except that nothing herein shall require the
Trust to pay any registration expenses occasioned by the initial issuance of
classes or series of its capital stock not related or attributable to the
Portfolio); the cost of preparing and distributing reports and notices to
stockholders; fees or disbursements of the custodian of the Trust's assets, of
the Trust's dividend disbursing agent and of the Trust's transfer agent,
including expenses incurred in the performance of any obligations enumerated in
the Trust Instrument of the Trust insofar as they govern agreements with such
custodian, dividend disbursing agent or transfer agent. To the extent employees
of the Adviser or its affiliates devote their time to the affairs of the Trust,
other than as officers or trustees, the Trust will reimburse the Adviser the pro
rata share of said individual's salary or wages and expenses and the Adviser
will keep specific time and other records of the same.
4. (a) For all services to be rendered and payments made as provided in
paragraphs 2 and 3 hereof, the Trust will pay the Adviser a fee based on the
average daily net asset value of the Portfolio, as determined in accordance with
the Trust Instrument of the Trust, which shall be computed at the following
rates:
(i) 3/4 of 1% of the portion of such average daily net assets
that shall not exceed $100 million.
(ii) 1/2 of 1% of the portion of such average daily net assets
that shall exceed $100 million.
(b) The amounts due the Adviser in payment of such fee shall be
accrued daily by the Trust on the basis of the number of days in each calendar
month, the net asset value of the Portfolio applicable to the close of each
business day in such month and, in the case of any day in such month which is
not a business day, the net asset value applicable to the close of the last
preceding business day; and the amount accrued with respect to each calendar
month shall become due and payable to the Adviser on the first business day of
the next succeeding calendar month. The Adviser hereby acknowledges that the
Trust's obligation to pay such fee is binding only on the assets and property
belonging to the Portfolio.
5. If any occasion should arise in which the Adviser gives any advice to
its clients concerning the shares of the Trust, the Adviser will act solely for
such clients and not in any way on behalf of the Trust.
6. The Adviser shall not be liable for any error of judgment or for any
loss suffered by the Trust or the Portfolio in connection with the matters to
which this Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the Adviser's part in the performance of its
duties or from reckless disregard by the Adviser of its obligations and duties
under this Agreement. Any person, even though also employed by the Adviser, who
may be or become an employee of and paid by the Trust shall not be deemed, when
acting within the scope of his employment by the Trust, to be the Adviser's
employee or agent. Any of the Adviser's officers or employees rendering
services (other than pursuant to paragraph 2 hereof) to the Trust as an officer
or employee of the Trust acting in any business of the Trust pursuant to the
undertakings contained in this Agreement, shall be deemed to render such service
solely to the Trust and in no respect to act under the Trust's control or
direction although paid by the Adviser.
7. This Agreement shall become effective on January 9, 1996, and
indefinitely thereafter, but only so long as the continuance after the second
anniversary of the effective date of this Agreement first set forth above shall
be specifically approved at least annually by the vote of a majority of Trustees
of the Trust or by a vote of a majority of the outstanding voting securities of
the Portfolio and, in either case, by vote of a majority of Trustees who are not
parties to this Agreement or "interested persons" of the Trust or the Adviser
within the meaning of the 1940 Act, cast in person at a meeting called for the
purpose of voting on such approval. This Agreement may, on 60 days' written
notice, be terminated at any time without
the payment of any penalty, by the Board of Trustees of the Trust, by vote of a
majority of the outstanding voting securities of the Portfolio or by the
Adviser. This Agreement shall automatically terminate in the event of its
assignment. In interpreting the provisions of this paragraph 7, the definitions
contained in the 1940 Act (particularly the definitions of "interested persons,"
"assignment" and "voting security"), and in any regulation of the Securities and
Exchange Commission thereunder, shall be applied.
8. The Adviser consents to the use by the Trust in its corporate name and
to designate the Portfolio of the name "Xxxxxxxx," or any variant thereof, but
only on condition that (a) any change in such corporate name or designation
which continues to use the "Xxxxxxxx" name or variant is approved in writing by
the Adviser and (b) so long as this Agreement shall remain in force, the Trust
shall fully perform, fulfill and comply with all the provisions expressed herein
to be performed, fulfilled or complied with by it. No such name shall be used
by the Trust at any time or in any place for any purposes or under any
conditions except as provided in this paragraph 8. Upon any termination of this
Agreement by either party or upon the violation of any of its provisions by the
Trust, the Trust will, at the request of the Adviser made within 60 days after
the Adviser has knowledge of such termination or violation, change its corporate
name and the designation of the Portfolio so as to eliminate all reference to
"Xxxxxxxx" or any variant thereof and will not thereafter transact any business
in a corporate name or on behalf of the Portfolio having a designation
containing such name or variant, or otherwise use such name or variant. Such
covenants on the part of the Trust set forth in this paragraph 8 shall be
binding upon it, its Trustees, officers, stockholders, creditors, affiliates and
all other persons claiming under or through it.
9. Upon the effective date of this Agreement, the Agreement dated as of
March 1, 1988, as amended, between the Adviser and the Trust shall be terminated
and shall be of no further force or effect, except as to the obligations to pay
fees accrued to the close of business on the date of termination.
10. There is to be no duplication of any fees payable to the Adviser under
this Agreement or the Agreement relating to the same subject matter between the
Trust and the Adviser which terminated on the effective date of this Agreement,
by reason of the termination of said prior Agreement and the commencement of
this Agreement.
11. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved by
vote of (a) holders of a majority of the outstanding voting securities of the
Portfolio and (b) by vote of a majority of the Trustees of the Trust who are not
parties to this Agreement or "interested persons" of the Trust or the Adviser,
cast in person at a meeting called for the purpose of voting on such approval.
12. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties to this Agreement have hereinafter executed
this Agreement as of the day and year first above written.
XXXXXXXX CAPITAL MANAGEMENT
INTERNATIONAL INC.
By: /s/ L. E. Luckyn-Xxxxxx
--------------------------
Title: President
XXXXXXXX CAPITAL FUNDS
(DELAWARE)
By: /s/ Xxxxxxxxx X. Xxxxx
--------------------------
Title: Vice President
