INVESTMENT ADVISORY AGREEMENT
Exhibit (d)(i)(H)
BAIRD
FUNDS, INC.
THIS INVESTMENT ADVISORY AGREEMENT (the
“Agreement”) is entered into as of the 12th day of August, 2008,
between Baird Funds, Inc., a Wisconsin corporation (the “Corporation”), and
Xxxxxx X. Xxxxx & Co. Incorporated, a Wisconsin corporation (the
“Advisor”).
W
I T N E S S E T H
WHEREAS, the Corporation is an open-end
investment company registered under the Investment Company Act of 1940, as
amended (the “1940 Act”). The Corporation is authorized to create
separate series, each with its own separate investment portfolio (the “Funds”),
and the beneficial interest in each such series will be represented by a
separate series of shares (the “Shares”).
WHEREAS, the Advisor is a registered
investment advisor, engaged in the business of rendering investment advisory
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 Advisor’s services and its assistance in performing
certain managerial functions. The Advisor desires to furnish such
services and to perform the functions assigned to it under this Agreement for
the consideration provided for herein.
NOW THEREFORE, the parties mutually
agree as follows:
1. APPOINTMENT OF THE
ADVISOR. The Corporation hereby appoints the Advisor as
investment advisor for each of the Funds of the Corporation on whose behalf
the Corporation executes an Exhibit to this Agreement, and the Advisor, by
execution of each such Exhibit, accepts the appointments. Subject to
the direction of the Board of Directors (the “Directors”) of the Corporation,
the Advisor shall manage the investment and reinvestment of the assets of each
Fund in accordance with the Fund’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 By-Laws of the Corporation as may from time to
time be in force.
2. DELEGATION OF
RESPONSIBILITIES. Advisor is hereby authorized to delegate all
or any of its duties hereunder to one or more subadvisors (each, a “Subadvisor”)
who are registered as investment advisors with the Securities and Exchange
Commission pursuant to the Investment Advisers Act of 1940 (the “Advisers
Act”). Each Subadvisor’s employment will be evidenced by a separate
written agreement approved by the Directors and, if required under the 1940 Act,
by the shareholders of the applicable Fund (unless the Securities and Exchange
Commission or its staff has given authorization or issued an interpretation
dispensing with the requirement of shareholder approval). Advisor
shall supervise and oversee the activities of each Subadvisor. Advisor shall not
be liable hereunder for any act or omission of any Subadvisor, except for
failure to exercise good faith in the employment of the Subadvisor and for
failure to exercise appropriate supervision of such Subadvisor, and as may
otherwise be agreed in writing. Advisor shall be solely responsible
for compensating any Subadvisor for services rendered under any subadvisory
agreement. Advisor may, from time to time and at any time, terminate
any subadvisor and reassume the responsibilities assigned to such Subadvisor
with respect to any Fund without obtaining the approval of the shareholders of
the Fund.
3. EXPENSES PAID BY THE
ADVISOR. In addition to the expenses which the Advisor may
incur in the performance of its responsibilities under this Agreement, and the
expenses which it may expressly undertake to incur and pay, the Advisor shall
incur and pay all 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 0000
Xxx) of the Advisor, and all expenses related to the rental and maintenance of
the principal offices of the Corporation.
4. INVESTMENT ADVISORY
FUNCTIONS. In its capacity as investment advisor, the Advisor
shall have the following responsibilities:
(a) To
furnish continuous advice and recommendations to the Funds, as to the
acquisition, holding or disposition of any or all of the securities or other
assets which the Funds 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 Funds, the investment recommendations of the Advisor, 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 the Advisor are not to be deemed exclusive and the Advisor 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 the Advisor 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 the Advisor, the Advisor shall
not be subject to liability to the Corporation, the Funds, or to any shareholder
for any act or omission in the course of, or in connection with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
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5. OBLIGATIONS
OF THE CORPORATION. The Corporation
shall have the following obligations under this Agreement:
(a) To
keep Advisor continuously and fully informed as to the composition of the Funds’
investments and the nature of all of their assets and liabilities;
(b) To
furnish Advisor 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 Funds’ shareholders or to any governmental
body or securities exchange;
(c) To
furnish Advisor with any further materials or information which the Advisor may
reasonably request to enable it to perform its functions under this Agreement;
and
(d) To
compensate Advisor for its services in accordance with the provisions of
paragraph 6 hereof.
6. COMPENSATION. The Corporation
will pay the Advisor a fee for its services
with
respect to each Fund (the “Advisory Fee”) at the annual rate set forth on the
Exhibits hereto. The Advisory Fee shall be accrued each calendar day
during the term of this Agreement and the sum of the daily fee accruals shall be
paid monthly as soon as practicable following the last day of each
month. The daily fee accruals will be computed by multiplying 1/365
by the annual rate and multiplying the product by the net asset value of the
Fund as determined in accordance with the Corporation’s registration statement
as of the close of business on the previous day on which the Fund was open for
business, or in such other manner as the parties agree. The Advisor
may from time to time and for such periods as it deems appropriate or for such
time and to the extent agreed on the Exhibits hereto for a Fund reduce its
compensation and/or assume expenses
for one
or more of the Funds (including initial organization costs); PROVIDED, HOWEVER,
that with respect to any agreement set forth on the Exhibits hereto the Advisor
shall be entitled to recoup such amounts for a period of up to three (3) years
from the date such amount was reduced or assumed.
7. EXPENSES
PAID BY CORPORATION.
(a) Except
as provided in this paragraph, nothing in this Agreement shall be
construed
to impose upon the Advisor the obligation to incur, pay or reimburse the
Corporation for any expenses not specifically assumed by the Advisor under
paragraph 3 above. Each Fund shall pay or cause to be paid all of its
expenses and the Fund’s allocable share of the Corporation’s expenses,
including, but not limited to, investment advisor 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 0000
Xxx) of the Advisor; 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
Fund 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 Funds, including but not
limited to, all costs involved in the registration or qualification of Shares of
the Funds 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 Funds.
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(b) If
expenses borne by a Fund in any fiscal year (including the Advisor’s fee, but
excluding taxes, interest, brokerage commissions, Rule 12b-1 expenses and
similar fees) exceed those set forth in any statutory or regulatory formula
applicable to a Fund, the Advisor will reimburse the Fund for any
excess.
8. BROKERAGE
COMMISSIONS. For purposes of
this Agreement, brokerage commissions paid by a Fund upon the purchase or sale
of securities shall be considered a cost of the securities of the Fund and shall
be paid by the respective Fund. The Advisor is authorized and
directed to place Fund 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 the Advisor 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 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 that particular transaction or the overall responsibilities of
the Advisor. In placing Fund business with such
broker or
dealers, the Advisor 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, as amended, and other applicable state and
federal laws. Notwithstanding the foregoing, the Corporation shall
retain the right to direct the placement of all Fund transactions, and the
Directors may establish policies or guidelines to be followed by the Advisor in
placing Fund transactions for the Funds pursuant to the foregoing
provisions.
9. PROPRIETARY
RIGHTS. The Advisor has proprietary rights in each Fund’s name
and the Corporation’s name. The Corporation acknowledges and agrees
that the Advisor may withdraw the use of such names from the Funds or the
Corporation should it cease to act as the investment advisor to any
Fund.
10. TERMINATION. This
Agreement may be terminated at any time, without penalty, by the Directors of
the Corporation or by the shareholders of a Fund 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 1940 Act), provided in either case that 60 days’ written
notice of termination be given to the Advisor at its principal place of
business. This Agreement may also be terminated by the Advisor at any
time by giving 60 days’ written notice of termination to the Corporation,
addressed to its principal place of business.
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11. ASSIGNMENT. This
Agreement shall terminate automatically in the event of any “assignment” (within
the meaning of Section 2(a)(4) of the 0000 Xxx) of this Agreement.
12. TERM. This
Agreement shall begin for each Fund as of the date of execution of the
applicable Exhibit and shall continue in effect with respect to each Fund (and
any subsequent Funds 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 (i) 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 (as defined
in the 1940 Act), cast in person at a meeting called for that purpose or (ii) by
the vote of a majority of the outstanding “voting securities” (as that phrase is
defined in Section 2(a)(42) of the 0000 Xxx) of each Fund. If a Fund
is added
after the
first approval by the Directors as described above, this Agreement will be
effective as to that Fund 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.
13. 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 the
affirmative vote of a majority of the outstanding “voting securities” (as that
phrase is defined in Section 2(a)(42) of the 0000 Xxx) of each
Fund.
14. GOVERNING LAW. This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of Wisconsin, provided, however that nothing herein shall be construed in
a manner that is inconsistent with the 1940 Act, the Advisers Act, or the rules
and regulations promulgated with respect to such respective acts.
This
Agreement will become binding on the parties hereto upon their execution of the
Exhibits to this Agreement.
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EXHIBIT
A
to
the
RIVERFRONT
LONG-TERM GROWTH FUND
For all services rendered by the
Advisor hereunder, the Corporation shall pay the Advisor, on behalf of the
above-named Fund, and the Advisor agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to 0.65% of
the average daily net assets of the Fund.
The annual investment advisory fee
shall be accrued daily at the rate of 1/365th of 0.65% applied to the daily net
assets of the Fund. The advisory fee so accrued shall be paid by the Corporation
to the Advisor monthly.
Executed as of this 12th day of August,
2008.
THE ADVISOR:
XXXXXX X. XXXXX & CO.
INCORPORATED
By: /s/ Xxxxxxx X.
Xxxxx
Xxxxxxx X. Xxxxx, Senior Vice
President
THE CORPORATION:
BAIRD FUNDS, INC.
By: /s/ Xxxx Xxxxx
Xxxxxx
Xxxx
Xxxxx Xxxxxx, President
