Exhibit No. EX. 99.d.2
THE XXXXXXX FUNDS
THE XXXXXXX STRATEGIC OPPORTUNITIES FUND
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between THE OLSTEIN FUNDS, a Delaware statutory
trust (the "Trust"), on behalf of THE XXXXXXX STRATEGIC OPPORTUNITIES FUND (the
"Fund"), and XXXXXXX CAPITAL MANAGEMENT, L.P., a New York limited partnership
(the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Trust has been organized and operates as an investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and engages in the business of investing and reinvesting its assets in
securities and other investments; and
WHEREAS, the Investment Manager is a registered investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
engages in the business of providing investment management services; and
WHEREAS, the Trust has selected the Investment Manager to serve as the
investment adviser for the Fund effective as of the date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. The Trust, on behalf of the Fund, hereby employs the Investment Manager
to manage the investment and reinvestment of the Fund's assets and to administer
its affairs, subject to the direction of the Board of Trustees and officers of
the Trust, for the period and on the terms hereinafter set forth. The Investment
Manager hereby accepts such employment and agrees during such period to render
the services and assume the obligations herein set forth for the compensation
herein provided. The Investment Manager shall for all purposes herein, be deemed
to be an independent contractor, and shall, unless otherwise expressly provided
and authorized, have no authority to act for or to represent the Trust or the
Fund in any way, or in any way be deemed an agent of the Trust or the Fund. The
Investment Manager shall regularly make decisions as to what securities to
purchase and sell on behalf of the Fund and shall record and implement such
decisions and shall furnish the Board of Trustees of the Trust with such
information and reports regarding the Fund's investments as the Investment
Manager deems appropriate or as the Trustees of the Trust may reasonably
request. Subject to compliance with the requirements of the 1940 Act, the
Investment Manager may retain as a sub-adviser to the Fund, at the Investment
Manager's own expense, any investment adviser registered under the Advisers Act.
2. The Fund shall conduct its own business and affairs and shall bear the
expenses and salaries necessary and incidental thereto including, but not in
limitation of the foregoing, the costs incurred in: the maintenance of its
corporate existence; the maintenance of its own books, records and procedures;
dealing with its own shareholders; the payment of dividends; transfer of stock,
including issuance, redemption and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholders' meetings; miscellaneous office expenses; brokerage commissions;
custodian fees; legal and accounting fees; and taxes. Partners and employees of
the Investment Manager may be trustees, directors, officers and employees of the
funds of which the Investment Manager serves as investment adviser. In the
conduct of the respective businesses of the parties hereto and in the
performance of this Agreement, the Trust may obtain office space and facilities
from the Investment Manager and will reimburse the Investment Manager for its
rent or other expenses thereby incurred.
3. (a) The Investment Manager shall place and execute Fund orders for the
purchase and sale of portfolio securities with broker-dealers. Subject to the
obtaining the best prices and execution reasonably available, the Investment
Manager is authorized to place orders for the purchase and sale of portfolio
securities for the Fund with such broker-dealers as it may select from time to
time. Subject to subparagraph (b) below, the Investment Manager is also
authorized to place transactions with brokers who provide research or
statistical information or analyses to the Fund, to the Investment Manager, or
to any other client for which the Investment Manager provides investment
advisory services. The Investment Manager also agrees that it will cooperate
with the Trust to execute instructions that brokerage transactions be allocated
to brokers or dealers who provide benefits directly to the Fund.
(b) Notwithstanding the provisions of subparagraph (a) above and subject to
such policies and procedures as may be adopted by the Board of Trustees and
officers of the Trust, the Investment Manager is authorized to cause the Fund to
pay a member of an exchange, broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange, broker or dealer would have charged for effecting that
transaction, in such instances where the Investment Manager has determined in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the Investment
Manager's overall responsibilities with respect to the Fund and to other funds
or clients for which the Investment Manager exercises investment discretion.
(c) The Investment Manager is authorized to direct portfolio transactions
to a broker which is an affiliated person of the Investment Manager or the Fund
in accordance with such standards and procedures as may be approved by the Board
in accordance with Rule 17e-1 under the 1940 Act, or other rules promulgated by
the U.S. Securities and Exchange Commission ("SEC"). Any transaction placed with
an affiliated broker must (i) be placed at best execution, and (ii) may not be a
principal transaction.
(d) The Investment Manager is authorized to aggregate or "bunch" purchase
or sale orders for various clients when it believes that such action is in the
best interests of such clients. In such an event, allocation of the securities
purchased or sold will be made by the Investment Manager in accordance with the
Investment Manager's written policy.
4. As compensation for the services to be rendered to the Fund by the
Investment Manager under the provisions of this Agreement, the Trust on behalf
of the Fund shall pay to the Investment Manager from the Fund's assets an annual
fee equal to 1.00% of the daily average net assets of the Fund, payable on a
monthly basis.
If this Agreement is terminated prior to the end of any calendar month, the
management fee shall be prorated for the portion of any month in which this
Agreement is in effect according to the proportion which the number of calendar
days, during which the Agreement is in effect, bears to the number of calendar
days in the month, and shall be payable within 10 days after the date of
termination.
5. The services to be rendered by the Investment Manager to the Trust on
behalf of the Fund under the provisions of this Agreement are not to be deemed
to be exclusive, and the Investment Manager shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
6. The Investment Manager, its partners, employees, and agents may engage
in other businesses, may render investment advisory services to other investment
companies, or to any other corporation, association, firm or individual, and may
render underwriting services to the Trust on behalf of the Fund or to any other
investment company, corporation, association, firm or individual. In accordance
with the Advisers Act, if there is a change in the membership of the Investment
Manager, which is a partnership, the Investment Manager shall, within a
reasonable time after such change, notify the Trust of the change.
7. In the absence of willful misfeasance, bad faith, gross negligence, or a
reckless disregard of the performance of duties of the Investment Manager to the
Fund, the Investment Manager shall not be subject to liabilities to the Fund or
to any shareholder of the Fund for any action 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, or otherwise.
8. In accordance with the Agreement and Declaration of Trust of the Trust,
in the event that the Investment Manager ceases to be the Fund's investment
adviser for any reason, the Trust will (unless the Investment Manager otherwise
agrees in writing) promptly take all necessary steps to propose to the Fund's
shareholders at the next regular meeting that the Fund change to a name not
including the word "Xxxxxxx."
9. This Agreement shall be executed by the parties and shall become
effective as of the date written below, provided it is approved by (i) the Board
of Trustees of the Trust, including a majority of the Trustees who are not
parties to this Agreement or interested persons of such party, cast in person at
a meeting called for the purpose of voting on such approval; and (ii) the vote
of a majority of the outstanding voting securities of the Fund as prescribed by
the 1940 Act; or on such later date that such approvals are obtained. It shall
continue in effect for a period of two years and may be renewed thereafter only
so long as such renewal and continuance is specifically approved as required by
the 1940 Act (currently, at least annually by the Board of Trustees or by vote
of a majority of the outstanding voting securities of the Fund and only if the
terms and the renewal hereof have been approved by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval). No amendment to this Agreement shall be effective unless the terms
thereof have been approved as required by the 1940 Act (currently, by the vote
of a majority of the outstanding voting securities of the Fund as prescribed by
the 1940 Act (unless shareholder approval of the amendment would not be required
to be consistent with SEC interpretations of Section 15 of the 1940 Act), and by
the vote of a majority of Trustees of the Trust who are not parties to the
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval). In connection with such
approval, it shall be the duty of the Board of Trustees of the Trust to request
and evaluate, and the duty of the Investment Manager to furnish, such
information as may be reasonably necessary to evaluate the terms of this
Agreement and any amendment thereto. Notwithstanding the foregoing, this
Agreement may be terminated by the Trust at any time, without the payment of a
penalty, on sixty days' written notice to the Investment Manager of the Trust's
intention to do so, pursuant to action by the Board of Trustees of the Trust or
pursuant to a vote of a majority of the outstanding voting securities of the
Fund. The Investment Manager may terminate this Agreement at any time, without
the payment of penalty on sixty days' written notice to the Trust of its
intention to do so. Upon termination of this Agreement, the obligations of all
the parties hereunder shall cease and terminate as of the date of such
termination, except for any obligation to respond for a breach of this Agreement
committed prior to such termination, and except for the obligation of the Trust
to pay to the Investment Manager the fee provided in Paragraph 4 hereof,
prorated to the date of termination. This Agreement shall automatically
terminate in the event of its assignment unless the parties hereto, by
agreement, obtain an exemption from the SEC from the provisions of the 1940 Act
pertaining to the subject matter of this paragraph.
10. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
11. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested persons"; and "assignment" shall
have the meaning defined in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to
be affixed and duly attested and their presents to be signed by their duly
authorized officers as of the 27th day of October, 2006.
Attest: The Olstein Funds
/s/ <signature illegible> By:/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, President
Attest: Xxxxxxx Capital Management, L.P.
By: Olstein Capital Management, LLC,
General Partner
/s/ <signature illegible> By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, President
